Moulton Niguel advances $83m debt issuance for wastewater and pipeline upgrades

Moulton Niguel advances $83m debt issuance for wastewater and pipeline upgradesThe California water district has authorized the sale of Certificates of Participation to finance its capital improvement program, buoyed by newly reaffirmed AAA credit ratings from S&P and Fitch.

The Public Facilities Corporation board approved a resolution authorizing up to $92.17 million in Certificates of Participation, targeting an $83 million issuance.

Proceeds will fund upgrades to wastewater treatment facilities, pump stations, lift stations, and pipeline improvements.

The district secured AAA ratings from both S&P and Fitch just prior to the June 11 meeting.

The district's municipal advisor anticipates strong demand from California-based separately managed accounts, with interest rates expected in the low 4% range.

The Moulton Niguel Water District Public Facilities Corporation has formally authorized the issuance of Certificates of Participation to finance a major phase of its Capital Improvement Program. At a June 11, 2026 meeting, the board approved a resolution allowing for a principal component of up to $92.17 million, which staff indicated will target an $83 million issuance. The new funding will be directed toward critical infrastructure projects, including replacements and upgrades to the district's wastewater treatment facilities, pump stations, lift station enhancements, and pipeline improvements. Jonathan Cruz, the district's Director of Financial Planning and Innovation, announced during the meeting that the district had successfully secured AAA credit ratings from both S&P and Fitch earlier that day. A staff member noted that the rating agencies conducted extensive surveillance, reviewing not only the agency's financial position but also its organizational controls, policies, and management. Darren Hodge, representing the district's municipal advisor PFM, told the board that the tax-exempt municipal bonds are expected to draw significant interest from California investors. Hodge noted that the district will rely heavily on separately managed accounts (SMAs), which bundle multiple investors together, alongside traditional retail buyers. In response to board questions regarding current market conditions, staff indicated that interest rates for the issuance are currently hovering in the "low 4%" range. The approved resolution mandates that the true interest cost of the installment payments must not exceed 5.50%, with a final maturity date no later than September 1, 2056. The board approved the resolution in a 5-0 vote, allowing the district to proceed with the execution and delivery of the 2026 Certificates of Participation and the associated installment sale agreement.