NKY Water District gets low rate on $25m in bond anticipation notes for infrastructure improvements

The Northern Kentucky Water District saves interest payers money by receiving record low interest rates on loans that are used to improve the district’s infrastructure.

RSA Advisors, LLC, headquartered in Lexington, served as the municipal advisor for the $ 25 million Series 2021A Anticipation Certificates in the Northern Kentucky Water District, which were rated MIG 1 by Moody’s Investor Services. The bonds received an interest rate of 0.375%.

“This record low interest rate should save the interest payer a significant amount of interest expense over the next two years,” said Lindsey Rechtin, vice president of finance and support for the district. “The district takes great pride in having our short-term credit upgrade to the highest possible rating and believes this is an accurate reflection of the hard work and dedication of the board of directors and management.”

Government agencies and local authorities use Bond Anticipation Notes – also known as BAN – to manage cash flow and provide temporary short-term funding.

“The low interest rate reflects the district’s strong credit rating,” said RSA managing director Joe Lakofka. “This is yet another example of how RSA is working closely with government and government agencies to manage their finances and save interest payers money.”

The district will use the BAN to fund infrastructure projects that include the following
• A new reading system.
• Plant improvements including improved residue handling.
• Sedimentation basins and chemical improvements.
• Improvements to the water system through the annual water pipe replacement program.

“The funds will be used to fund necessary projects to help the district maintain existing infrastructure and to provide funds to provide improved reliability and functionality through the new meter reading system,” said Ron Lovan, President / District CEO. “Our mission is to provide our customers with safe, clean, and adequate water supplies through a reliable system that meets all state and federal standards while delivering great value at a reasonable cost. This bond issue is necessary for the district to support its mission. “

Moody’s raised the district’s credit rating from Aa3 to Aa2 at the end of 2019. More recently, the district received an upgrade to MIG (Municipal Investment Grade) rating for the BAN from MIG-2 to MIG-1 highest possible rating in the first quarter of 2021, and a reflection of the district’s strong long-term credit quality.

“The district has worked diligently over the past few years to strategically manage our debt portfolio, along with long-term interest management and project management thinking to put the district in a strong financial position,” said Rechtin.