SUBJECT
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Adopt Resolution 2026-11 to Approve the Truist Loan Refinancing and New Money Interim Loan (Action Item)
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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 Bank proposed a $154,338,308 fixed-rate tax-exempt bank loan to be used as interim financing. The Truist loan had an interest rate of 3.55% with tender dates beginning in November 2025 and every six months thereafter until November 2028. 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 Interest on the Truist loan has been paid annually by member payments. 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 on the WIFIA loan using the Truist loan, the PRWC maintained the flexibility to request a one-time interest rate reset on the WIFIA loan if rates declined and certain conditions were met. Interest rates have increased since May 2023, and the WIFIA loan rate of 4.02% is much lower than the current applicable WIFIA loan rate of approximately 5.26%.
In November 2025, the PRWC extended the Truist loan for one year to continue to access interim financing at a lower interest rate than WIFIA. The loan was extended to November 13, 2026, at an interest rate of 3.78%.
The PRWC would like to continue to access interim financing at a lower interest rate than WIFIA and may wish to repay portions of the interim financing from WIFIA, grants, and/or SRF loan proceeds over the next year. To be able to pay...
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