Shoreline Water District announces favorable bond ratings from Moody's

Shoreline Water District is in the process of funding $8,200,000 of various capital improvements and refinancing the 1999 Water Revenue Bonds for interest cost savings. As part of the process for preparing the bond sale, the District presented information to the national rating agency of Moody’s Investor Services.

The District was recently notified that the underlying bond rating grade is “Aa3” from Moody’s. 

“This bond rating grade reflects that Shoreline Water District is very well-managed and has strong financial practices and policies in place for the benefit of our ratepayers” stated Ron Ricker, President of the Board of Commissioners.

According to Stu Turner, District Manager, “the District received the bond rating grade of “Aa3” based on the following factors: 1. Strong ending fund balances; 2. Small amount of outstanding debt; 3. Debt service coverage ratios; 4. Strong local economy; and 5. Experienced management in operating the District in an efficient manner.”

The Aa3 is the fourth highest rating grade in the Moody’s multi-tier grading system, which signifies to investors that there is very low risk of default on the Bonds. The higher the rating grade then the lower the interest cost. The Refinancing Bond will achieve a Total Net Savings of $282,065, which is an annual savings of $35,258 for the remaining 8 years. The 8-year Refinancing Bond has a Net Borrowing Rate of 1.66%.

The District also issued a 20-year Water Revenue Bond to fund $8,200,000 of capital improvements, including a significant remodel of the administrative office and remodel/replacement of the shop facility, constructing water main extensions, installing water meters, and other capital improvements to the System. The 20-year Revenue Bond has a Net Borrowing Rate of 3.07%.

“The District has timed the bond financings near a historic low in interest rates, which lowered our interest cost and saves money for our ratepayers. We are very pleased with the results of the bond sale”, according to Commissioner Ricker.

The District’s staff of Stu Turner (District Manager), Mary O’Day (Finance Manager), and Denny Clouse (Operations Manager), in coordination with John Ghilarducci (Utility Rate Consultant of FCS Group), and Jim Nelson (Bond Underwriter of Martin Nelson & Company) participated in a conference call with Moody’s, which dealt with the topics of management, finances, local economy, policies, and long-term planning.

The Water Revenue and Refunding Bonds will be underwritten by Martin Nelson and Company, a Washington investment banking firm, based in Seattle.