Fayetteville PWC completes $94 million bond issuance
By Staff Report, posted Nov 5, 2021 on BizFayetteville.com
Fayetteville PWC announced today that has issued $94.79 million of revenue bonds at the lowest rate ever achieved by PWC outside of state lending.
The interest rate clocked in at 2.278 percent. The purchaser of the bond series was Citigroup Global Markets Inc, and the PWC funding closed yesterday.
“The low cost of borrowing helps PWC maintain highly-reliable utility services and demonstrates the strength of Fayetteville’s utility system and its management,” said PWC CEO/General Manager Elaina Ball in the press release. “When we can fund continued system improvements through low-cost borrowing, it ensures we can continue to provide reliable utility services while also managing our customers’ costs.”
The Series 2021 Bonds were issued to go toward funding electric, water and wastewater utility improvements.
“The investment continues to address PWC’s multi-year plan of rehabilitation and replacement of aging infrastructure to ensure safe and reliable services for our 118,000 customers,” Ball said.
Out of the $94.79 million, $90 million of the bond funding goes toward PWC’s water and wastewater system; $48 million is “to replace, upgrade and rehabilitate system mains, manholes and lift stations”; more than $10 million will be used for back up generation for the water and wastewater treatment facilities to prepare for storms; and $8.2 million will be used for plant improvements and expansion plans for PWC’s Rockfish Water Reclamation facility.
Seven million dollars from the bond funds will be used by PWC’s electric system. It will help replace one of 30 substations and help “Fayetteville's Hometown Utility” to expand the battery storage system PWC has at its Community Solar Farm.
“The Charleston Group, a Fayetteville Legal Firm, served as Bond Counsel for the transactions, while First Tryon Advisors, a Charlotte firm, served in the Public Finance Advisory role,” the release said. “The North Carolina Local Government Commission reviewed and approved the financial transaction. The Bank of New York Mellon Trust Company served as Trustee and Disbursement Agent securing the project and debt service funds over the life of the bonds.”
“PWC received favorable bond ratings by all three rating agencies which underpins our credit-worthiness and keeps our cost of capital low,” said Ball. “Utilities required a substantial amount of capital to keep up with growth, replace aging infrastructure and maintain the reliability of their systems. Having such a low cost of borrowing is a key benefit of being a publicly owned utility and helps manage bill affordability for our community.”
PWC’s AA stable financial ratings were affirmed by agencies Moody’s, S&P and Fitch Rating during the bond issuance process.
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