Water bonds

The bond sale follows an upgrade by S&P Global Ratings but comes while the city is in the midst of an extreme drought.

The District of Columbia Water and Sewer Authority is applying for a reimbursement from the federal government for repair costs to a broken water line that flooded the Potomac River with raw sewage.

The drought-stricken Texas city's utility system rating was cut two notches to A, marking a continued downward trend in its credit quality.

The Texas city's latest projection for the onset of a Level 1 emergency comes as water woes spurred rating downgrades and negative outlooks since last fall.

Agreements with water districts in the county next door are part of changes to the business plan that include plans to pay off bond debt early.

The rating agency's previous review of the Texas city resulted in downgrades in December over increased credit risk due to water supply woes.

Chicago will issue $875 million of second lien water revenue bonds in a deal with a possible tender component, Acting CFO Steven Mahr said.

The rating agency cited the prospect of lowered debt service coverage ratios in the next three years.

The Texas city is facing a potential level 1 emergency, indicating the water system is 180 days from supply not meeting demand.

The state's latest water plan outlines $174 billion of capital water needs over the next 50 years. "The era of cheaper water is over," said one state water official.

S&P cited the system's structural challenges, physical risk exposure and uncertainty about the system's overall financial and operational trajectory.

The East San Francisco Bay area water and wastewater utility will price into a market that has seen increased revenue bond issuance.

The Texas city's bond issue will mostly refinance short-term commercial paper into long-term debt and refund some callable Series 2015 bonds.

The drinking and clean water state revolving fund programs and other water infrastructure programs are up for reauthorization this year.

The rating agency, which also put the bonds on CreditWatch Negative, cited weakening liquidity and aging assets. 

A California Department of Water Resources issuance, based on a resolution extending contracts with water agency customers, drew strong demand.

In rural areas, "even modest rate increases can force low-income households to choose between water service and other basic necessities," Matt Odermann from the National Rural Water Association told senators Wednesday.

The Texas city, which is a regional water supplier, is turning to several sources to boost dwindling water supplies amid an ongoing drought.

Attorneys and lawmakers are working through questions from clients and water authorities about finalized drinking water rules by the EPA regarding "forever chemicals."

The state's Local Government Commission approved the borrowing Tuesday.