Featured Municipal Bond Issue, Week of November 12, 2018: City of Philadelphia, PA Water and Wastewater Revenue Bonds Series 2018 A — $275 Million
This week, MuniNet features the City of Philadelphia. On or around November 15th, The City intends to issue by negotiated sale a total of $275,085,000 Water and Wastewater Revenue Bonds. The Series 2018 bonds are to be used to finance capital improvement of the city’s Water and Wastewater Systems, to make any necessary deposits to the debt service reserve fund and pay the costs of issuance for the bonds. The bonds being sold are rated A1 by Moody’s, A+ by S&P and A+ by Fitch. The bonds are being sold by underwritten by a negotiated group led by Citigroup and Siebert Cisneros Shank & Co., LLC. The sale is expected to occur during the week of November 12, 2018 subject, in part, to market conditions.
The bonds will be special obligations of the City secured by a pledge of and security interest in all project revenues as detailed in the prospectus derived from the city’s water and wastewater systems on an equal basis with the City’s outstanding water and wastewater revenue bonds (other than subordinated bonds, of which there are currently none outstanding). They are not payable from the city’s tax or general revenues of the city, nor are they a general obligation of the city, and neither the full faith and credit or taxing power of the city is pledged. The city has covenanted to bondholders that it will pledge to establish rates and revenues in each fiscal year at least equal to 1.2 x the debt service requirement for each fiscal year.
The city’s offering materials project that the City projects an estimated total 2017–18 debt service coverage of 1.3x relative to total senior debt and 1.0 for all debt obligations.
The City’s water department service area covers over 1.5 million persons, including the city of Philadelphia as well as a number of wholesale contract customers in the neighboring area. The ten largest customers of the system represent 9.4 % of revenues.
Potential investors should review the preliminary official statement offering document in its entirety for complete details and special provisions related to the Security or the 2018A Bonds and the Proposed Amendments to the Master Indenture. Visitors to Munios must register first on MUNIOS.COM website before clicking on the specific reference to the Official Statement. An investor road show slide presentation accompanies the prospectus on the munios.com website.
Interest on the Series 2018A bonds are in the opinion of Bond Counsel tax-exempt for federal income tax purposes and are exempt from State of Pennsylvania income taxes.
Details on the purposes, tax-status, security, risks as well as other matters pertaining to these OSF bonds can be found in the preliminary official statement after registering on the munios website and searching for the City of Philadelphia Water and Wastewater Revenue Bonds.
These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.