Metropolitan St. Louis Sewer District issues $175 million in Prop Y bonds
The Metropolitan St. Louis Sewer District has completed the sale of its first issue of Proposition Y bonds, representing $175 million of a total $500 million in bonds that were authorized by district voters this past February.
The bond proceeds will be used to finance the first phase of the district's projected 18-year, $3.7 billion Capital Improvement and Replacement Program, which is designed to improve the sewer district's wastewater collection and treatment capabilities.
This first bond issue, known as Series 2004A bonds, has an average interest rate of 4.79 percent and a final maturity of 30 years, according to a district news release.
About $76 million of the 2004A bonds were purchased by individual investors — primarily from the state of Missouri — with the remaining $99 million going to institutional investors.
In discussing the details of the bond issue, Eric Cowan, vice president at Banc of America Securities, stated in the news release, "With more than 40 percent of the issue sold to local investors, and at interest rates lower than some other more well-known national issuers received by competitive sale on the same day, MSD was able to pass low interest costs on to its ratepayers, while allowing local citizens to make an investment in their community.
"This bond issue was developed with an intentional focus on St. Louis firms and St. Louis investors — and we delivered,'' Cowan added.
MSD Board of Trustees Chairman, Robert J. Baer stated in the release, "From day one, we've focused on our entire St. Louis community benefiting from Proposition Y — both in terms of the wastewater system improvements that are being financed, and in terms of who would be able to take part in the bond issues.
"MSD is proud that we were able to provide local investors with the opportunity to participate in this bond issue — it speaks to the success that our St. Louis community can achieve when we work together,'' Baer added.
The Series 2004A bonds were assigned a credit rating of Aa2, AA and AA by Moody's Investor Services, Fitch Ratings, and Standard & Poor's Rating Service, respectively, and were issued through a negotiated sale, according to the news release.