Saving more than $33 million over the next 26 years, the Metropolitan Water District of Southern California has issued variable rate water revenue refunding bonds to repay a portion of the agency's outstanding water revenue debt.
Brian G. Thomas, Metropolitan's chief financial officer, said the district coupled the sale of $338 million in variable rate water revenue refunding bonds with an earlier interest rate swap to meet the agency's savings guidelines and targets. Proceeds from the bond sale will help refund a total $298.3 million from Metropolitan's 1996C and 1997S water revenue bond issues.
Thomas said the refunding would save the district $33.3 million over the life of the bonds. Savings will range from $1.2 million and $2.2 million per year through July 2030.
"With this transaction, we will have refunded more than $500 million in various bonds this year to lower our long-term capital costs," said Thomas. "This marks our largest sale of the year and the most significant savings, which will help offset future water cost increases."
One of the nation's largest wholesalers of treated drinking water, Metropolitan is the Southland's primary water importer. The district provides about 50 percent of the water used by 18 million Southern Californians.