Press release from City of Asheville:
We are pleased to announce that the City of Asheville successfully issued a series of Water Revenue Bonds on September 30, 2021. What does this mean? Bonds are a financial tool that cities can use to pay for various things like capital projects. In 2018, the City of Asheville took out a $40 Million bank loan to pay for the North Fork Dam improvement project. The Water Revenue Bonds will cover that loan.
There are several good news items to report from this transaction:
-The City continues to work with financial advisors to be good stewards of taxpayer dollars
-The City once again received high ratings from Moody’s Investor Services (Moody’s) and Standard & Poor’s Global Ratings (S&P)
-These bonds were issued as Green Bonds
During the recent issuance process, both Moody’s Investor Services (Moody’s) and Standard & Poor’s Global Ratings (S&P) affirmed their debt ratings of Aa1 and AA+ respectively for the City’s water revenue bonds. Having such a high rating from both Moody’s and S&P gives the City strong access to financial markets and ultimately lowers borrowing costs and saves the City money. The total interest cost for the Water Revenue Bonds issued on September 30 was just under 2.1%
“We are very pleased with the outcome of the Water Bond issuance,” said Tony McDowell, the Finance Director for the City of Asheville. “Total cost of issuance was around 2.1% which speaks highly of the market’s view of the City and our Water Department specifically. We appreciate the work of our financial and legal advisors, our underwriter, and the finance and water teams that made this happen.”
The City of Asheville was the first municipality in North Carolina to issue green bonds in 2015. Green bonds raise funds for projects with environmental benefits. Sustainable water management is one of the categories eligible for green bond financing and one that describes well the improvement projects at the North Fork Dam. The issuance of the 2021 Water Revenue Refunding Bonds as green bonds continues that effort.