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24th Consecutive Year Earning Premier Rating for Maryland’s Largest Water and Sewer Utility
All Three Rating Agencies Maintain the Utility’s Outlook as Stable
Laurel, Md. – February 6, 2025 – For the 24th consecutive year, WSSC Water received the highest possible credit ratings (AAA) from all three financial rating agencies – Fitch Ratings, Standard & Poor’s Global (S&P) and Moody’s Investor Service on today’s sale of $311.5 million in consolidated public improvement general obligation (GO) bonds. The bond sale included $30 million in green bonds.
In Fitch Ratings overview, the firm noted, “The AAA bond rating considers [WSSC Water’s] very strong utility fundamentals, as reflected in its revenue defensibility and operating risk profiles…” The ratings firm also stated the rating outlook continues to be stable.
Fitch Ratings went on to note a “very low operating cost burden,” and stated, “In fiscal 2024, the systems operating cost burden was considered very low at $5,747 per million gallons (mg), consistent with the operating risk assessment. The life cycle ratio was very low at 33% in fiscal 2024. Capex to depreciation has been strong, averaging 190% over the last five fiscal years from 2020 to 2024. Planned capital spending for the next five years should generally outpace historical depreciation, supporting a continued very low life cycle ratio.”
“Maintaining the AAA bond rating and a stable outlook is a testament to WSSC Water’s leadership and fiduciary responsibility,” said Commission Chair T. Eloise Foster. “The outcome-based operating and capital budget is a key factor in ensuring sound financial planning to maintain the coveted rating for years to come.”
“The water utility industry is very capital intensive as we address aging infrastructure and make critical technological advancements to improve service, efficiencies and overall operations,” said WSSC Water General Manager and CEO Kishia L. Powell. “With this AAA rating, our cost of capital is reduced, which is a direct benefit to our customers and communities.”
In its AAA rating, Moody’s Ratings affirmed, “[WSSC Water’s] revenues provide adequate debt service coverage and the [WSSC Water’s] cash position has improved since the pandemic era. Fiscal 2024 debt service coverage levels were adequate and fiscal 2025 operations are trending similarly.”
WSSC Water received six bids for its bonds offered with BofA Securities, Inc., the winning bid. The bonds will be repaid over 30 years and locked in a final borrowing cost of 3.91 percent. Despite municipal market rates being higher from the last time WSSC Water was in the market in February 2024, the Commission was able to sell its bonds at tighter credit spreads to the AAA Municipal Market Data Index and achieve an overall lower cost of borrowing. The bonds are scheduled to close on February 20, 2025.
Proceeds from the general obligation bonds will fund key capital projects, including:
Proceeds from the sale of $30 million in green bonds will fund the following upgrades:
WSSC Water’s Green Financing Framework was assigned a Sustainability Quality Score 2 (very good) from Moody’s Investor Services. The Framework establishes WSSC Water’s process for financing projects across eligible green categories. The framework is aligned with the four core components of the International Capital Market Association's (ICMA) Green Bond Principles.
Moody’s did identify WSSC Water as a “best practice” for clear eligible categories, environmental objectives, expected benefits and allocation and tracking of proceeds.
To learn more about WSSC Water’s financial information, visit wsscwater.com/fin.
WSSC Water is the proud provider of safe, seamless and satisfying water services, making the essential possible every day for our neighbors in Montgomery and Prince George’s counties. We work to deliver our best because it’s what our customers expect and deserve.