Pittsburgh, PA - Recently, PWSA successfully issued approximately $94.4 million in new debt and remarketed $218.8 million of outstanding debt. The two transactions combined were oversubscribed by 11.5 times, which means that there was more investment interest than the bonds could fulfill. Investors submitted $3.6 billion in orders to buy $313.2 million of PWSA debt.
"Investors oversubscribing at that level indicates there is a strong demand to buy PWSA debt. It also demonstrates the stability and strength of PWSA’s credit,” said PWSA Director of Finance, Edward Barca.
The issuance of this new debt will help fund our Capital Improvement Program (CIP), which focuses on the replacement of water mains, the removal of lead lines, the rehabilitation of aging sewer lines, and a series of once-in-a-generation projects to renew key components of our water production and distribution systems. These projects will strengthen our water system, add needed redundancy, and ensure an uninterrupted supply of quality water.
As part of the debt transactions, Moody’s Investors Services (“Moody’s") assigned an A3 rating with a stable outlook, and S&P Global Ratings (“S&P”) assigned an A rating with a stable outlook. The positive ratings act as a PWSA credit report for investors and reaffirm PWSA’s investment grade credit status. Investment grade credit status typically results in lower interest rates that will save PWSA money in the long term. The interest rate of the $94.4 million new debt issuance is 2.85%.
Moody's and S&P cited similar strengths in support of the rating including:
- Pittsburgh's diverse and strong economy
- Large customer base with numerous stable and highly ranked customers
- Sound financial practices and strong management
- Improved liquidity
- PUC oversight
- Extensive capital program with local and Statewide support
"We are proud of the team that we have put in place over the last three years. The confidence investors have in our ability to budget and plan illustrates the hard work of our leaders to establish industry-leading policies and practices," said Will Pickering, PWSA Chief Executive Officer.