Aurora in the Largest Municipal Bond Issuance in Colorado This Year

AURORA, Colo.--(BUSINESS WIRE)--

Aurora Water, the water department for the city of Aurora, Colorado, sold $437,025,000 in bonds on July 21, 2016 in an effort to refund all existing water debt, most of which is associated with the Prairie Waters Project. This refunding is the single largest municipal public bond issuance in Colorado in 2016 and will consolidate two previous bonds and a state loan at a time when bond yield rates are at historic lows. The all in rate for the refunding was 3.12%, resulting in a net present savings in excess of $68.6 million or 12.9%.

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"The market's positive response to this bond sale is proof that Aurora is well positioned to meet the future needs of our community," stated Aurora Mayor Steve Hogan. "The strong governance and financial management of our award-winning water system has resulted in the highest combined ratings that Aurora Water has ever received."

Aurora Water received a bond ratings of AA+ Stable Outlook from both Fitch and S&P Global. This is the highest combined rating Aurora Water has ever received.

In assigning its rating and outlook, S&P Global noted that the water fund's financial performance and liquidity have been well positioned in recent years.

"The rating reflects, in our opinion, the combination of a very strong enterprise risk profile and an extremely strong financial risk profile," said S&P Global Ratings credit analyst John Schulz.

Fitch cited Aurora Water's solid financial profile, the ramping down of debt, the affordability of service and strong long-term planning. Fitch also highlighted the revenue opportunities that the WISE (Water Infrastructure and Supply Efficiency) Partnership, Aurora's cooperative venture with Denver Water and the South Metro Water Supply Authority, will provide. WISE will provide excess water, when available, to several communities in the south metro Denver area that are currently dependent on non-renewable groundwater. Limited WISE deliveries are expected to begin in late 2016, with full deliveries expected by 2021.

The city is designating this issuance as Green Bonds, which are used to fund environmentally beneficial projects, which include the Prairie Waters Project. This is expected to be the largest sale of Green Bonds for a water utility in the nation. The Prairie Waters Project, completed in 2010 at a cost of $637 million, is considered a model for environmental sustainability in the arid west. The project recaptures water that Aurora already owns in the South Platte River and makes full use of Aurora's mountain and agricultural water rights, increasing the city's water supply by up to 12 million gallons per day.

These bonds were sold via negotiated sale through the City's underwriting syndicate, led by book-running senior manager Morgan Stanley, co-senior RBC Capital Markets, with BofA Merrill Lynch, and Wells Fargo Securities serving as co-managers on the transaction.

S&P's press release can be found at https://www.standardandpoors.com/en_US/web/guest/article/-/view/type/HTML/id/1672919.

Fitch's press release on this rating can be found at https://www.fitchratings.com/site/pressrelease?id=1008630.

Aurora Water is the third largest municipal utility in Colorado, providing water, sewer conveyance and storm drain services to the city of Aurora. Aurora Water has over 81,000 accounts, serving a population of 351,200. Aurora is the only city in the nation with three water treatment facilities with the "Phase IV – Excellence in Water Treatment" designation from the Partnership for Safe Water. Ideally located near Denver International Airport and the Rocky Mountains, Aurora has a diverse industry mix that includes the Fitzsimons Medical Campus and Buckley Air Force Base. With room to grow, Aurora is projected to double its population in the next 40 years. The Regional Transportation District (RTD) is completing a light rail system through the heart of the city that connects Aurora to the airport and the metro-wide commuter system.

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