SUBJECT
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Adopt Resolution 2025-24 to Approve the First Amendment to the Truist Loan Agreement (Action)
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DESCRIPTION
In April 2023, the PRWC Board of Directors approved the WIFIA loan agreement in the amount of $305,799,441 to provide long-term funding for eligible project costs through the anticipated five-year construction period. The WIFIA loan closed in May 2023 and has an interest rate of 4.02%.
As an alternative to drawing from the WIFIA loan for the initial three years of construction, Truist Commercial Equity, Inc. ("Truist") an affiliate of Truist Bank submitted a proposal to the PRWC for a $154,338,308 fixed-rate tax-exempt bank loan to be used as interim financing. The Truist loan has an interest rate of 3.55% with tender dates beginning in November 2025 and every 6 months thereafter until November 2028, unless modified by Truist. The Truist loan was fully funded at closing, allowing for the loan proceeds to be invested in a fully collateralized depository account with Truist Bank in accordance with the PRWC Investment Policy. Interest on the Truist loan is capitalized and will be included in the WIFIA take-out. The net interest cost of the Truist loan, when considering investment earnings, results in debt service savings when compared to draws on the higher interest rate WIFIA loan.
Additionally, by delaying draws from the WIFIA loan using the Truist loan, the PRWC maintains the flexibility to request a one-time interest rate reset on the WIFIA loan assuming certain conditions are met. if the applicable treasury rates go down in the future prior to the WIFIA loan being drawn and as long as PRWC has spent less than 50% of eligible project costs, the PRWC may request a one-time interest rate reset to lower the interest rate on the WIFIA loan.
With the November 2025 loan tender date approaching and the PRWC spending at a slower rate than anticipated, the PRWC requested Truist to extend the tender date on the loan. This would allow for an...
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