Castaic Lake Water Agency officials completed a $56.4 million bond sale on Thursday, saving $5.9 million in debt service costs and generating funds for major water projects, according to officials.

The sale refunds an outstanding bond series and supplies new funds for important water infrastructure projects which will enhance water supply reliability throughout the Santa Clarita Valley.

Present value savings for the refunding portion are estimated to be $5.9 million, or 16.6 percent. The refunding will reduce the agency’s annual debt service costs by an average of $500,000.

For the new funds, the agency was able to take advantage of an extremely low interest rate environment in which the bonds were issued at an all-in true interest cost of 3.44 percent.

“The board has a policy to review current debt and take advantage of historically low interest rates to refinance if appropriate to reduce the total cost to our customers,” said CLWA Administrative Services Manager Valerie Pryor.

Related: Castaic Lake Water Agency Awarded For Budget

The new money generated from the bond sale is earmarked to fund ongoing major Capital Improvement Program (CIP) projects, including expanding the recycled water system, improving groundwater banking projects and treatment plant upgrades.

These projects have taken on paramount importance as officials continue to address the uncertainty of California’s ongoing drought, and are designed to further support the agency’s mission of delivering reliable, quality water at a reasonable cost to the Santa Clarita Valley.

In March 2016, the agency received an upgraded rating from Standard & Poor’s from AA to AA+ on the senior obligations and from AA- to AA on the parity obligations.

Standard & Poor’s stated, “The raised ratings reflect … the agency’s robust liquidity position, consistent debt service coverage and well-delineated financial policies, which address any contingent liabilities.”

Ed. Note: This article is a press release provided by the Castaic Lake Water Agency.