Short-Term Debt

 

The Water Authority currently has three forms of short-term debt, Tax-Exempt Commercial Paper (TECP), Extendable Commercial Paper (ECP), and a five-year fixed-rate bond.

The Water Authority established its TECP Program in 1995. Commercial paper is a form of variable-rate debt, and is issued with maturities of 1 to 270 days. When the commercial paper matures, it is rolled over to new investors by the Water Authority’s commercial paper dealers. The Water Authority has authorized the issuance of up to $245,000,000 of TECP, with $245,000,000 presently issued and outstanding. The TECP has been issued in two series – Series 9 ($135,000,000), and Series 10 ($110,000,000). Series 9 was issued on May 11, 2016 and series 10 was issued on June 19, 2019. Each of these series is supported with a bank “revolving credit and term loan agreement”.  As of August 13, 2019, no advances have been made under any of the revolving credit and term loan agreements.

The Water Authority established an ECP Program in June 2014. ECP is considered a market access product. A market access product such as ECP does not require bank liquidity to back stop the notes.  This allows the Water Authority to save on bank costs for revolving credit and term loan agreements which support the TECP program. ECP is issued with a final maturity between 1 and 120 days. If the notes cannot be remarketed at their maturity date, the notes will be automatically extended to 270 days from the initial issuance and bear interest at a penalty rate until the notes can be remarketed or redeemed. The product’s final maturity of 270 days assures that ECP complies with SEC Rule 2a7, making the notes eligible investments for money market funds. The ECP has been issued as Series 1, for $100,000,000 par amount.

On June 23, 2016, the Water Authority issued $87.685 million in five-year fixed-rate bonds. The bonds mature May 1, 2021.

 

Short-Term Active Debt Instruments Size (in Millions) Liquidity Provider Issuing & Paying Agent Dealers/Remarketing Agents
Series 1 (ECP) $100 n/a U.S. Bank

Bank of America Merrill Lynch
Morgan Stanley
JP Morgan

Series 9 $135 Bank of America, N.A. U.S. Bank

Citigroup
J.P. Morgan Chase
LOOP Capital
Merrill Lynch Pierce
RBC Capital Markets

Series 10 $110 Bank of the West U.S. Bank J.P. Morgan Chase
Morgan Stanley
Merrill Lynch Pierce
Goldman Sachs
         
TOTAL $345      

Commercial Paper Short-Term Ratings         Fitch         S&P         Moody’s
                                                                        F1            A1+             P1