Debt and Bond
Rating Outlook
Capital Finance Team
49 50
Outstanding Borrowing Obligations
SFPUC has $11 billion of
outstanding debt which
together with undrawn
facilities represents $13.1
billion of outstanding
borrowing and undrawn
capacity on Commercial
Paper, WIFIA and SRF
borrowing
- 1,000 2,000 3,000 4,000 5,000 6,000
Water
Wastewater
Power
Borrowing by Enterprise
($ millions as of June 30, 2025)
Public Market Revenue Bonds and Notes Federal WIFIA Loans (Drawn) State SRF Loans (Drawn) NCREBs and QECB
Certificates of Participation Commercial Paper (Drawn)
51 Why Does SFPUC Issue Debt?
• Debt proceeds will pay nearly two-thirds of our capital plan with $11.1 billion of issuance projected in the 10-year plans
• SFPUC accesses ‘advantaged financing’
• Short term notes and Commercial Paper
• Tax Exempt Bonds
• Taxable Municipal Bonds
• State Revolving Fund Loans
• Federal Loans (like WIFIA, CWIFP) and Tax Credit / Direct Pay Financing • Borrowing accelerates construction and is repaid in future dollars • San Francisco construction inflation of 4% (Turner & Townsend.com) • Borrowing costs vs. construction inflation costs
• Intergenerational equity
• Manage rate impacts of large capital acquisitions
Rates illustrative only; actual rates subject to change • Use interim credit facilities – witho ut drawing on them – for release of Controller’s Reserves.
• Borrow in small amounts only as needed from Commercial Paper proceeds.
• When capacity exhausted, refund comm ercial paper with long-term bonds or loans to re-establish capacity.
52 SFPUC Works Hard to Reduce Borrowing Costs
53 Capital Financing Assumptions in Plan
• Simple long-term debt assumptions across three enterprises. • Borrowing rates: 4.75% in FY27 and 5.00% in FY28
• Future issuances remains at 6.00% in remainder of the 10-year plan • Federal Reserve began cutting rates in September 2024 • Market anticipates further modest Fed rate cuts in 2026 • Continuing to reduce assumed reliance on Capitalized Interest • Assume 24-months for Water and Wastewater bonds through FY2032, eliminated thereafter
• Eliminated for Power
• Tool remains available
54 Interest Rate Environment
Tax-Exempt Yield Curve
(Nov. 2024 vs Nov. 2025)
Tax-Exempt Rate (20yr)
(Nov. 2024 to Nov. 2025)
Source: BVAL AAA Callable Municipal Curve, EMMA as of November 29, 2025. 55 New 10-Year Debt Issuance Plan
Source: 10-Year Financial Plan, amounts may not total due to independent rounding. 10-Year Debt Plan for FY 2026-2035 included $10.3 billion of planned debt 10-Year Debt Plan for FY 2027-2036 calls for $11.1 billion of planned debt (includes some borrowing that has slipped into new plan)
*Does not include refunding on the 2024A WW Revenue Bonds ($M) FYE
2027
FYE
2028*
FYE
2029
FYE
2030
FYE
2031
FYE
2032
FYE
2033
FYE
2034
FYE
2035
FYE
2036 Total
Water $0 $1,121 $0 $1,024 $0 $897 $0 $0 $0 $0 $3,042
Wastewater $1,359 $890 $1,009 $0 $1,252 $0 $0 $1,460 $0 $0 $5,971 Power $0 $0 $609 $0 $456 $0 $427 $0 $0 $570 $2,062
Total $1,359 $2,012 $1,618 $1,024 $1,708 $897 $427 $1,460 $0 $570 $11,075 56 Water Existing and Projected Debt Service
(10-Year Plan Assumptions)
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
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
Millions
Outstanding Rev Bonds SRF Loans Capital Plan NDS Net Revenues Existing Debt Service
Capital Plan Debt
57 Wastewater Existing & Projected Debt Service
(10-Year Plan Assumptions)
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Fiscal Year
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
Millions
Outstanding Rev Bonds NDS SRF Loans WIFIA Loans Capital Plan NDS Net Revenues Capital Plan Debt
Existing Debt Service
58 Power Existing & Projected Debt Service
(10-Year Plan Assumptions)
*Net revenue figures include fund balance budgeted as revenue $-
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
Fiscal Year
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
2056
2057
2058
2059
Millions
Outstanding Rev Bonds Capital Plan NDS Net Revenues
Capital Plan Debt
59 Actively Seeking Refinancing Savings
Prolonged period of declining rates; more recent period of rising rates
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
30Y MMD 30Y UST
10-Year Average 30Y MMD 10-Year Average 30Y UST
30-Year Avg.Jan-02
3.98%4.25%30-Year MMD
4.20%4.86%30-Year UST
30-YEA R HISTORICA L MMD A ND UST YIELDS
Source: LSEG Municipal Market Monitor, J.P. Morgan as of 01/02/2026 60 Bond Refinancing As a Function of Time
Refunding opportunities obvious when rates are dropping…but what about in stagnant interest rate period?
61 Projected Future Refunding Opportunities
*Charts provided by JP Morgan, September 2025
Wastewater Enterprise Callable Revenue Bonds ($Millions) (Calendar Year) Water Enterprise
Refunding monitors indicate many potential opportunities for future financings over the next ten years.
WWWWater Enterprise
Water Enterprise Callable Revenue Bonds ($Millions) (Calendar Year) 62 Actively Pursuing Multiple Refinancings
• Wastewater Enterprise
• $295.1 million of 2013B , 2016A and 2016B current refundings • $162 million of Build America Bonds (for cashflow savings and Federal subsidy risk mitigation) • Tender Refundings of 2018A and 2018B bonds
• Water Enterprise
• $412.2 million of 2016AB current refundings
• $351.5 million of Build America Bonds (for federal subsidy risk mitigation) • Tender Refundings of 2017DEF , 2019ABC, 2020B, 2020EFGH bonds • Power Enterprise
• 2015 Power Bonds
• All Enterprises
• 2009D Golden Gate Certificates of Participation Build America Bonds ^Updated ratings available from Moody’s Investors Service (www.moody’s.com), S&P Global Ratings (www.spglobal.com) and Fitch Ratings (www.fitchratings.com) †CleanPowerSF received an A2 issuer rating from Moody’s Investors Service in December 2020, however the CleanPowerSF Program currently does not have any debt outstanding 63 High Ratings Allow SFPUC to Borrow at Low Rates
Long Term Credit Ratings
(Credit Outlook)
Moody’s
Ratings
S&P Global
Ratings
Fitch
Ratings
Water
Enterprise
Aa2
(Stable)
AA-
(Stable)
*
Wastewater
Enterprise
Aa2
(Stable)
AA
(Negative)
*
Power
Enterprise
*A A
(Stable)
AA-
(Stable)
CleanPowerSF†A 2
(Stable)
**
Water Enterprise
• Last update for June 2025 refunding
• AA- from S&P at bottom of Charter's "High"
Rating category
Wastewater Enterprise
• Last updated for new BMO credit facility in
November
• On notice - "Negative Outlook"
Power Enterprise
• Last updated in August 2025
• Successfully argued to remove "Negative
Outlook" from S&P applied earlier in year
CleanPowerSF
• No bonds outstanding; important for
power purchase negotiations