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Friendswood council approves $20.35M water and sewer revenue bonds; sale set for March 27
Summary
Council approved an ordinance authorizing issuance and sale of Water Works and Sewer System Revenue Bonds Series 2025. City advisers said the sale raised $20.35 million with an all-in interest cost of about 4.17% and the proceeds will fund system needs and reserves.
The Friendswood City Council on March 3 approved an ordinance authorizing the issuance and sale of City of Friendswood Water Works and Sewer System Revenue Bonds, Series 2025.
Bond advisers told council the sale totaled $20,350,000 in par bonds, produced about $1.838 million in premium, funded a required reserve deposit and paid issuance costs. The bonds carry an all-in true interest cost of about 4.172% and an average life of roughly 15.66 years. Bond counsel and staff said the market transaction saved the city roughly $1.5 million compared with an earlier price estimate in February, in part because the city purchased bond insurance (cost about $35,000) that increased the underlying rating and reduced interest expense by a larger amount.
Officials said proceeds will be used to fund water/wastewater capital needs, fund a reserve account, and pay issuance expenses; closing is scheduled for March 27, 2025. Council approved the ordinance on second and final reading.
Bond advisor remarks noted local and revenue-rating distinctions and that the underwriter accepted some bonds into inventory to maintain yields for the city’s benefit. City staff praised the finance team and bond counsel for securing favorable terms in the current market.
