SAN FRANCISCO - Seattle is planning to sell $146 million of drainage and wastewater improvement revenue bonds in a competitive offering on Tuesday.
Proceeds will pay for various projects for the city's drainage and wastewater system, and to refund outstanding revenue bonds.
Foster Pepper PLLC is bond counsel and Piper Jaffray & Co. is financial advisor.
The deal will be structured with serial bonds maturing in 2015 through 2044.
The bonds will be secured by revenues of the drainage and wastewater system, as well as any pledged utility local improvement district assessments.
Moody's Investors Service and Standard & Poor's rated the bonds Aa1 and AA-plus.
"The Aa1 rating primarily reflects the utility's strong service area, which covers the city of Seattle and its well-maintained financial operations which benefit from active city management oversight," Moody's analysts said in the credit report. "Also important to the rating assignment is the utility's sound debt service coverage, consistently above the internal target policy of 1.80 times."
The drainage and wastewater system is operated by Seattle Public Utilities, a department of the city, and serves a population of over 627,000.
Both Moody's and Standard & Poor's assign stable outlooks.
Challenges to the rating, S&P analysts wrote, include the system's liquidity position, which is considered low for the AA-plus rating, as well as its relatively large capital plan.
Standard & Poor's said that if liquidity gets drawn down to a lower level, it could lower the rating.
This week's issue is part of the wastewater system's six-year capital improvement program for years 2014 through 2019. The program covers $646 million in projects, including reducing combined sewer overflows, and flooding and sewer backup prevention.
Around $113 million of proceeds from the deal will be used under the program.
The city currently plans to issue another $301 million in bonds over the next six years for the program.
