The Great Lakes Water Authority opened its doors at the start of 2016 taking regional responsibility for one of the nation’s largest water and sewer systems. The authority had long been in the works and it emerged from the ashes of Detroit's bankruptcy to manage services for 3.9 million residents. The GLWA board, truly regional in nature, is comprised of members from Wayne, Oakland and Macomb counties, with a state government representative.
With bondholder consent, GLWA became obligor on the Detroit Water and Sewerage Department’s $5.2 billion bond portfolio. The bonds had been dragged into Detroit’s Chapter 9 despite their isolated revenue pledge and the shift to GLWA offered new protections should Detroit’s fiscal recovery falter. The system made its market debut in October 2016 with a $1.34 billion sale that raised $283 million of new money for projects and $300 million of refunding savings that helped ease pressures on rates.
After being stung by steep downgrades during Detroit’s bankruptcy, the now GLWA-backed bonds were buoyed by upgrades that restored the senior lien into the A category. The sale drew $2.1 billion of orders from 48 major institutional accounts, as well as multiple Michigan retail accounts, and cemented GLWA’s new status as an issuer.