Bonds Sale Raises $109 Million for Water and Sewer Projects

Financial Management - April 23, 2009
Contact: Denise Bell, 747-6900

The city of Winston-Salem sold $109,030,000 of water and sewer revenue bonds last month in two days after underwriters assigned the bonds high ratings.

Proceeds of the bond sale will be used to modernize the R.A. Thomas Water Treatment Plant, upgrade the Archie Elledge Wastewater Treatment Plant, and finance various other capital improvement projects to ensure that Winston-Salem has sufficient water and sewer capacity to last beyond 2030.

After the capital improvement projects are completed, Winston-Salem will continue to have the lowest water and sewer rates of the five largest cities in North Carolina.

The bonds were rated AAA by Standard & Poor’s, AA2 by Moody’s Investors Services, and AA by Fitch Ratings. The high ratings reflect the strong financial position, sound management, low water billing rates, and abundant water supplies available to the City/County Utility Commission.

The bonds went on sale March 5 with maturities from three to 30 years and were sold at an average interest rate of 4.51 percent, which is below other comparably rated bonds being offered in the market at the same time. Almost 40 percent of the bonds were sold at retail on the first day of the two-day sale. The rest were sold to institutional investors. There were twice as many orders for the bonds than there were bonds to sell.

The bond sale was handled by a team of underwriters led by BB&T. Also participating were Wachovia (Wells Fargo), Bank of America, Citigroup and Loop Capital Markets.