Bloomberg News

San Francisco Agency Sells Sewer Debt in Week’s Biggest Offer

February 12, 2013

The Public Utilities Commission of the City & County of San Francisco (88349MF:US) sold about $332 million of bonds backed by wastewater revenue in the biggest municipal offer scheduled for this week.

The issue was the first in California’s fourth most- populous municipality after Moody’s Investors Service this month raised the rating of the city and county’s general obligations to the second-highest level.

Rates ranged from 2.01 percent on securities maturing in October 2023 to 3.6 percent on 2042 bonds, data compiled by Bloomberg show.

San Francisco’s commission plans to sell $4.8 billion of revenue bonds over 10 years for sewer improvements, Todd Rydstrom, the chief financial officer, said in an interview before the sale. Proceeds from today’s issue will go toward a $2 billion replacement of a treatment facility.

The competitive deal was the first borrowing backed by wastewater revenue since 2010 that wasn’t aimed at retiring debt, Rydstrom said.

Moody’s on Feb. 5 increased the general-obligation bond rating of San Francisco to Aa1 because of the “notable strengths” of its tax base and economy. Its jobless rate was 6.7 percent in November, below the state average of 9.6 percent, Standard & Poor’s said.

S&P rates the commission’s debt AA-, fourth-highest, saying it has a “demonstrated ability and willingness” to adjust rates.

To contact the reporter on this story: Romy Varghese in Philadelphia at rvarghese8@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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