The Rhode Island Infrastructure Bank intends to sell $154 million of refunding bonds on Wednesday.
The bank, which manages several loan programs, has planned a $111.9 million sale of Series 2019A federally taxable water pollution control refunding revenue bonds, and $41.9 million in Series 2019C tax-exempt and Series 2019D federally taxable safe drinking water refunding revenue bonds.
Morgan Stanley is lead manager. There is no retail period. Closing is scheduled for Dec. 18.
The Providence-based bank originated in 2013 as an outgrowth of its predecessor agency, the Rhode Island Clean Water Finance Agency.
Its programs include the Water Pollution Control State Revolving Fund; the Drinking Water State Revolving Fund; the Community Septic System Loan Program; the Efficient Buildings Fund; the Commercial PACE Program; and the Facility Plan Loan Program.
S&P Global Ratings and Fitch Ratings rate the bonds AAA. Both assign stable outlooks.
According to the bank, no loan defaults or delinquent payments on pledged loans have occurred since its inception. The bank requires all borrowers to submit annual financial information and also reviews borrower ratings.
“We view the enterprise risk profile of the combined drinking and clean water program as extremely strong,” S&P said. “This is due to a combination of the low industry risk profile for municipal pools and the program's market position, which we also consider extremely strong.”
Credit strengths, according to bank officials, include a strong management team; a long-term history for both programs with no borrower defaults; secured pledged borrower loans; and a security package that includes additional bonds tests, a step-up provision and cross-investment between programs.
Bank officials expect the refundings to raise senior bonds debt service coverage to a range of 1.42 times to 2.9 times for the water pollution control bonds and 1.59 times to 1.77 times for the drinking water bonds.
Hilltop Securities is the municipal advisor. Nixon Peabody bond counsel. Harrington & Vitale Ltd. is counsel for the bank. Mack Law Associates LLC is representing the underwriters.
