Commercial Paper

In December 2001, the Authority closed on its $100 million Commercial Paper (CP) Program. This program will provide interim financing for a portion of the Authority's $3.2 billion Capital Improvement Program (PDF 3.3 mb) (other financing sources include EPA grants, wholesale customer contributions, and pay-as-you-go financing). Under this program, the Authority issues fixed rate, short-term (no greater than 270 days) notes. To provide liquidity and credit support for the notes, the Authority has entered into an irrevocable letter of credit (LOC) with Westdeutsche Landesbank Girozentrale (WestLB). The notes are rated based on WestLB's rating; in effect the LOC of the bank substitutes the Authority's security with the paying ability of the bank, enhancing the appeal and marketability of the notes. The notes are payable from and secured by a subordinate lien on the Authority's net revenues, as further described in the Authority's master trust indenture, as supplemented.