CHICAGO — The Metropolitan St. Louis Sewer District will refund $142 million of revenue debt for savings this week in its final deal under the fiscal stewardship of longtime secretary-treasurer Karl Tyminski.
The agency took retail orders on Monday and planned to price for institutions Tuesday. Siebert Brandford Shank & Co. is the senior manager with JPMorgan serving as co-senior manager.
The sale was expected to produce between $20 million and $22 million in savings on the advance refunding of 2004 debt. In August the district began tapping $945 million of new voter-approved bond authority with a $225 million revenue-backed issue to fund projects included in a $4.7 billion consent decree with federal environmental authorities. The agency’s next new-money sale won’t occur until October 2013, officials said.
This week’s deal marks the last under Tyminski who will retire at the end of the month. He joined MSD in 1988 as the internal auditor and a year later was elevated to secretary-treasurer. He previously served as the cost accounting supervisor for Anheuser-Busch Cos. Tyminski also teaches courses on economics, accounting and finance at several Missouri colleges.
MSD spokesman Lance LeComb said the agency has begun interviewing candidates but “we have no timetable at the moment other than to find the right person with the right skill sets and experience and the right fit to manage what are crucial pieces of MSD’s present and future operations.”
Ahead of the sale, Fitch Ratings affirmed the district’s AA-plus rating, Moody’s Investors Service affirmed its Aa1 rating, and Standard & Poor’s affirmed its AAA rating. The district has $604 million of outstanding senior-lien wastewater revenue debt secured by the system’s net revenues.
The rating “reflects the system’s large and diverse service area that encompasses the city of St. Louis and most of St. Louis County,” Moody’s wrote. The rating also reflects the district’s willingness and ability to raise rates at regular intervals, declining but still satisfactory debt-service coverage; and debt levels that will significantly increase to fund its extensive capital program.
MSD is the fourth largest wastewater system in the country.
A federal judge in the spring approved the consent decree, bringing to a close a five-year-old lawsuit over clean-water violations. The program extends over the next 23 years and comes on top of $2.5 billion already spent on capital projects over the last two decades. In June, voters in the district endorsed $945 million in borrowing to help keep rate increases in check.
The rate-setting process will begin again in 2015 and future referendums are likely. “We have strong stakeholder support, so the markets should see a more steady supply of MSD paper over the next four to eight years,” Tyminski said in a recent interview.
