1 1
Nikolai J. Sklaroff,
Capital Finance Director
August 27, 2024
San Francisco Public Utilities Commission Presentation
Recent Wastewater Enterprise
Bond Sale Results
Bond Sale Results Announcement
2 • Informational Update on
2024 Wastewater
Enterprise Revenue
Bonds
• Detailed description in
Bond Sale Results
Announcement emailed
on August 1, 2024
• Further information from
our investor website
reachable through:
Debt
Management and
Disclosure Reports
(sfpuc.org)
•
•
•
Official Statements
(Series 2024ABCD)
3 3
Wastewater Revenue Bond Sales
(Series 2024AB Taxable Bonds)
4 2024 Series A 2024 Series B
Commission
Approval
June 25, 2024 Commission Meeting
Authorized
Par and
Purpose
Up to $480 million to
finance Biosolids
Digester Facilities
from SSIP
Up to $125 million to re-
finance the Southeast
Community Center
Pricing July 17, 2024
Sale Negotiated (BofA Securities as Senior Manager
and Morgan Stanley as Co-Senior Manager)
Ratings Moody’s Investors
Services affirmed
Aa2, and Stable
outlook
S&P Global Ratings
did not assign a long-
term rating to the
2024 A Bonds
Moody’s Investors
Services affirmed Aa2,
and Stable outlook
S&P Global Ratings
affirmed AA-; Lowered
Outlook from Stable
to Negative
Wastewater Revenue Bond Sales
(Series 2024CD Tax-Exempt Bonds)
5 2024 Series C 2023 Series D
Commission
Approval:
June 25, 2024 Commission Meeting
Authorized
Par and
Purpose
Up to $700 million to retire commercial paper
and fund various SSIP capital projects (Series
C) and non-SSIP capital projects (Series D).
Pricing July 18, 2024
Sale Negotiated (Morgan Stanley as Senior Manager
and BofA Securities as Co-Senior Manager)
Ratings Moody’s Investors Services affirmed
Aa2 and Stable outlook
S&P Global Ratings affirmed AA- and lowered
Outlook from Stable to Negative
2024 Bond Sale Conditions
(AAA Rated Bonds Over Past 30 Years)
6Source: Montague DeRose and Associates, Municipal Market Data Index data as of 7/18/2024.
2024 Bond Sale Results
7 SFPUC’s strong credit ratings and reputation in the capital market generated strong demand that allowed bonds to be sold at lower rates:
2024 Series AB 2023 Series CD
Maturities Series A
2027
Series B
2027, 2028, and annually from 2032
to 2038
Annually from 2027 to 2031 and
2037 to 2046
Term bonds in 2049 and 2054
Pricing Details Lowered offering interest rates over
the entire course of the pricing by
0.015% to 0.045% (1.5 to 4.5 basis
points)
Lowered offering interest rates by
0.04% to 0.11% across different
maturities (4 to 11 basis points)
Total
Subscription
$633.41 million of total orders for
$518.165 million of bonds available
(1.22x of the available bonds)
$1.377 billion of total orders for
$625.93 million of bonds available
(2.2x of the available bonds)
2024ABCD Final Pricing Results
8 2024 Series
A
2024 Series
B
2024 Series
C
2024 Series
D
Total
Par Amount $431,110,000 $87,250,000 $539,720,000 $84,895,000 $1,142,975,000 Premium 64,812,627 10,183,513 74,996,141
Total Proceeds $431,110,000 $87,250,000 $604,532,726 $95,078,514 $1,217,971,141 All-In True
Interest Cost
4.774% 4.992% 4.177% 4.179% 4.293%
Sale Date July 17, 2024 July 17, 2024 July 18, 2024 July 18, 2024 Final Maturity 10/1/2027 10/1/2037 10/1/2054 10/1/2054 10/1/2054 Municipal Advisors
(Independent and Registered)
9 • Montague DeRose & Associates
• Backstrom, McCarley & Berry
Independent Pricing Consultant
(2024AB and 2024CD Reports)
10 As per policy on SFPUC negotiated bond
sales, in addition to our Municipal Advisors,
we engaged an Independent Pricing
Consultant (PFM Financial Advisors LLC) to
evaluate the results of the sale.
o “…given the structure of the bonds,
market conditions, the order received by
the Underwriters during the marketing
and the final pricing levels,
we have
concluded that the 2024AB Bonds were
reasonably and fairly priced
…”
o “Based on the data noted in this report,
the orders received by the Underwriters
during the marketing and final pricing
levels,
we have concluded that the
2024CD Bonds were reasonably and
fairly priced
...”
Outstanding Wastewater Debt
($ million)
11 Before
2024ABCD
After
2024ABCD
Revenue Bonds $2,369 $3,431
Drawn Federal WIFIA
Loans $915 $915
Drawn SRF Loans $337 $337
Commercial Paper
x Authorized
x Drawn
750
342
750
0 Total $3,963 $4,683
Net result:
• Secured $431.11 million of proceeds from Series 2024A to fund the Biosolids Digesters Facilities Project
• Secured $87.25 million of proceed from Series 2024B to refinance the Southeast Community Center on a taxable basis
• Secured $699.61 million of proceeds from series 2024C and 2024D to retire outstanding commercial paper that provided interim financing and fund a portion of SSIP and non-SSIP wastewater capital projects through Fiscal Year 2024-25
12Source: Montague DeRose and Associates
Debt Service Schedule
(Post Series 2024 ABCD)
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
2056
2057
2058
2059
2060
2061
2062
2063
2064
2065
2066
2067
Wastewater Debt Service Projections
Outstanding Rev Bond NDS Outstanding SRF Loans Planned SRF Loans WIFIA 1&2 WIFIA 3a&b 2024ABCD NDS
Annual Bond Issuance
(Calendar Year)
13*Represents only bonds issued. In addition, the SFPUC utilizes various other financing tools including loans and credit facilities. $0
$500
$1,000
$1,500
$2,000
$2,500
2001 2002 2003 2006 2009 2010 2011 2012 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 $ millions
SFPUC Annual Issuance*
Water (Green) Water (Non-Green) Wastewater (Green) Wastewater (Non-Green) Power (Green) Power (Non-Green) • The transaction was the SFPUC’ s largest bond issuance to date. • Together, the $970.83 million of 2024 A Bonds and 2024 C Bonds represent the SFPUC’s largest issuance of Green Bonds to date.
• The SFPUC has issued $5.268 billion of Green Bonds from 2015 to date, ranking it among the earliest and among the largest issuers of municipal green bonds in the nation.
14 Questions