TWDB says its bond deal saved $198 million for local projects
DALLAS – The Texas Water Development Board’s $1.2 billion revenue bond sale in September will save local utilities about $198 million on the cost of projects designed to increase or conserve water supplies, officials said.
By using its triple-A credit rating to raise funds for 23 local projects throughout the state, TWDB was able to raise funds at a significantly lower cost than the local issuers could have achieved, officials said.
The bond sale on Sept. 28 was the largest in TWDB’s history and the third coming from the voter-approved State Water Implementation Fund for Texas, known commonly as SWIFT.
“Texas water utilities have saved approximately $400 million in the first three years of the SWIFT program,” said TWDB chairman Bech Bruun. “These savings are not only important for the project sponsors, but also for the water utilities’ customers. By saving millions of dollars through the SWIFT program, the utilities can pass on savings to their rate payers.”
At its Sept. 28 meeting, the board established the interest rates for SWIFT borrowers. The rates were set as a result of the bond sale.
Bonds maturing in 2052 with 4% coupons priced at a 3.744% yield to maturity.
The bonds were rated triple-A by S&P Global Ratings and Fitch Ratings.
“SWIFT financial assistance plays a vital role in developing state water plan projects and securing Texas’ water supply,” said TWDB Board member Kathleen Jackson. “We’ve been able to commit $450 million to conservation and reuse projects and more than $30 million to agricultural and rural projects.”
The application period for the fourth round of the SWIFT program will open later this year. To be eligible for the upcoming round of SWIFT, projects must be included in the 2017 State Water Plan.
“The SWIFT program’s low-cost funding incentivizes Texas communities to prepare for the next drought by participating in creating the state water plan,” said TWDB Board member Peter Lake. “The fact that we have committed $5.6 billion in just the first three years of the program demonstrates that Texas is already developing the water infrastructure it knows it will need in the future.”
SWIFT was established by the Texas Legislature and voters in 2013 to fund projects in the state water plan.
The TWDB is the state agency charged with collecting and disseminating water-related data, assisting with regional planning, and preparing the state water plan for the development of the state’s water resources. The TWDB administers cost-effective financial assistance programs for the construction of water supply, wastewater treatment, flood control, and agricultural water conservation projects.