Austin, Texas, will sell up to $575 million of water and wastewater system revenue refunding and improvement bonds possibly later this month after the city council approved the debt deal on Thursday.
The majority of the revenue bond proceeds — $450 million — will refinance short-term commercial paper into long-term bonds, allowing Austin Water to take advantage of currently favorable market conditions and restore the available capacity under its tax-exempt commercial paper program for future borrowing, according to a city staff recommendation.
Another $75 million is earmarked for refunding some callable Series 2015 A bonds.
"Using interest rates as of February 2026, the transaction is estimated to produce $8.7 million in present value savings," the staff recommendation said.
New money bonds totaling up to $50 million will fund capital projects for the Walnut Creek Wastewater Treatment Plant. The bonds are secured by Austin Water's net revenue.
Subject to market conditions and other factors, the debt is expected to be priced the week of March 23, according to a city spokesperson.
On Wednesday, Fitch Ratings assigned an AA-minus and stable outlook to the bonds, citing the water system's "very strong" financial and operating risk profiles.
"The system's leverage, measured as net adjusted debt to adjusted funds available for debt service, was very low at 5.3x in fiscal 2025," Fitch's rating report said.
Ratings are also expected from Moody's Ratings and S&P Global Ratings.
The deal's underwriter team consists of senior manager Raymond James, co-senior manager BofA Securities, and co-managers Mesirow Financial and Piper Sandler.
McCall, Parkhurst & Horton is the deal's bond counsel, Orrick, Herrington & Sutcliffe is disclosure counsel, and PFM Financial Advisors is the municipal advisor.
