WSSC Water Maintains AAA Bond Rating On $360M Bond Sale

• Fitch Ratings Retains Negative Outlook for AAA Rating
• Sale of $20M in Green Bonds Highlights Utility’s Environmental Commitment

WSSC Water today received AAA bond ratings from all three financial rating agencies - Fitch Ratings, Standard & Poor’s Global (S&P) and Moody’s Investor Service on a February 14 sale of $360M in consolidated public improvement general obligation bonds. This marks 22 years in a row that WSSC Water has achieved this premier rating. The February 14 bond sale includes $20M in green bonds.

In S&P Global’s rating overview, the firm states, “Management has prudent financial, operational, and capital policies, which we view as critical to the ‘AAA’ rating.” However, Fitch Ratings retained a Negative Outlook for their AAA rating. In their analysis of the bond sale, Fitch noted: “The pandemic caused adverse service area disruptions, resulting in substantial revenue pressures to the district’s (WSSC Water) financial performance in fiscal years 2020 and 2021.”

“Achieving this rating is a testament to WSSC Water’s strong fiscal management,” said Commission Chair Fausto R. Bayonet. “At the same time, the negative outlook sends a clear message that we need to continue making sound financial decisions to ensure we remain at a AAA rating.”

“Maintaining our AAA bond rating is key in securing low-interest rates on our capital borrowing, which funds projects to enhance the reliability and resilience of our critical infrastructure,” said WSSC Water General Manager and CEO Kishia L. Powell. “We will carefully evaluate all options to improve our fiscal position regarding the negative outlook. Our financial strength is critical to fulfilling our clean-water mission and directly linked to our ability to invest in our people, Team H2O, who work tirelessly in service to our 1.9 million customers.”

Proceeds from the general obligation bonds will fund key capital projects, including:

• Piscataway Bioenergy Facility: $74.4M
• Water reconstruction: $71.6M
• Contribution to Blue Plains Advanced Wastewater Treatment Plant: $64.3M

Green bonds are issued specifically to fund projects with significant environmental benefits. The issuance of green bonds requires WSSC Water developing a Green Bond Framework documenting the specific use of the bond proceeds, the criteria and process for evaluation and selection of projects, the management of the proceeds and ongoing reporting on key performance indicators.

Proceeds from the sale of the green bonds will fund the following upgrades:

• Potomac Water Filtration Plant: $15M
• Large-diameter water distribution system: $5M

The Green Bonds received an environmental benefit score of 92/100 from S&P, with a strong governance and reporting opinion.