OWDA Prices $160.1 Million in triple-A Bonds
The Ohio Water Development Authority is issuing $160.1 million in fixed-rate bonds on Tuesday. The paper is rated triple-A by both Moody's and S&P Global Ratings.
The Ohio Water Development Authority is issuing $160.1 million in fixed-rate bonds on Tuesday. KeyBanc Capital Markets is pricing the deal. This marks the fifth issue under the fresh water revolving fund subordinate indenture structure. The bonds carry a triple-A rating from both Moody's and S&P Global Ratings. Both agencies assign a stable outlook.
The proceeds will fund loans to local government agencies. These loans support wastewater treatment, sewer, and water supply facilities. The issue also refunds outstanding Series 2016B bonds. The bonds are callable on June 1, 2036. Hilltop Securities serves as the municipal advisor. Squire Patton Boggs acts as bond counsel.
Structure and Seniority Details
Todd Skruck, OWDA CFO, confirmed the senior fresh water indenture is closed to new issuance. This covenant protects the senior status of existing bonds. The new Series 2026B bonds are issued on parity with other revolving fund bonds. They are subordinate to the senior fresh water bonds. This structure has been used for all new issues since August 2024.
The fresh water revolving fund bonds are secured by loan payments. The fund includes a diverse pool of loans. This provides significant overcollateralization for bondholders. Approximately $3.08 billion in loans have been awarded to date. The current principal balance outstanding is $2.22 billion.
Loan Pool and Coverage
Columbus is the largest borrower with 17.23% of the remaining balance. Licking Regional Water District holds 7.85% of the total. Revenues pledged include net income from cooperative agreements. Excess loan repayments flow to the revolving fund trust. This provides an average 1.28x semi-annual debt service coverage over the next 20 years.
Cybersecurity and Operational Risk
Two cybersecurity incidents occurred in 2023. One involved unauthorized submission of inaccurate bank information. This affected a construction contractor related to loan draws. The authority is implementing additional safeguards. These include two-factor authentication for loan processing. A third-party service will validate account ownership. GN auto markets/bonds notes the authority is addressing these controls.
