DC Water issued $300 million in bonds this week in a successful, one-day sale. DC Water issues long-term bonds to fund its capital improvement projects. The Authority currently has a $3.8 billion, 10-year capital improvement program that includes three of the most ambitious projects in its history and an accelerated water main replacement program.

The bonds sold are subordinate lien, fixed-rate, tax-exempt new money bonds that mature in 28 to 35 years, reflecting the useful life of these long-term engineering projects. Investor demand was high, making it possible to reduce yields by one basis point under challenging market conditions. Interest rates varied from 4.85 percent to 5.04 percent, still lower than the debt DC Water issued three years ago. Paying lower interest rates lowers annual operations expenses for debt payments.

"That is important as we enter the most active period of construction at the Blue Plains Advanced Wastewater Treatment Plant," commented DC Water General Manager George S. Hawkins. "We look to every possible way to minimize rate increases to pay for these projects. In addition, the high demand for DC Water bonds points to market confidence in DC Waters financial performance, management and strategic planning."

In recent years, the Authority has had tremendous success in the bond market. In 2012, DC Water issued $277 million in new bond financing and refinanced $163 million at much lower interest rates. In 2009, all $300 million in bonds sold to retail and institutional investors in one day.