Narrative
Full Description
Project narrative
On July 1, 2015, Wells Fargo Bank, N.A. entered into a $180 million USD senior revolving credit facility (RCF) agreement with the Metropolitan Water District of Southern California — a water wholesaler and treater cooperative of local governments in Southern California — to finance the purchase price of any self-liquidity bonds by Metropolitan. This RCF carried an expiration and maturity date of July 1, 2018 (a maturity period of three years). The RCF featured covenants that, if failed to be observed, could result in a termination of commitments and the immediate due and payable of the commitments. The borrower had no obligation to make borrowings under, or maintain the RCF. Then, on November 4, 2015, Wells Fargo Bank assigned $100 million USD of its $180 million USD share of the RCF to the Industrial and Commercial Bank of China (ICBC), with ICBC assuming of its obligations in regards to that share and Wells Fargo retaining the remaining $80 million USD.
Staff comments
1. The Metropolitan Water District of Southern California is a metropolitan water district created in 1928 under authority of the Metropolitan Water District Act (California Statutes 1927, Chapter 429, as reenacted in 1969 as Chapter 209, as amended), where it gained authority to levy property taxes within its service area; establish water rates; impose charges for water standby and service availability; incur general obligation bonded indebtedness and issue revenue bonds, notes and short-term revenue certificates; execute contracts; and exercise the power of eminent domain for the purpose of acquiring property. Metropolitan’s primary purpose is to provide a supplemental supply of water for domestic and municipal uses at wholesale rates to its member public agencies. If additional water is available, such water may be sold for other beneficial uses. Metropolitan serves its member agencies as a water wholesaler and has no retail customers. Metropolitan’s charges for water sales and availability are fixed by its board, and not subject to regulation or approval by the California Public Utilities Commission or any other state or federal agency. Metropolitan imports water from two principal sources: northern California via the Edmund G. Brown California Aqueduct of the State Water Project owned by the State of California and the Colorado River via the Colorado River Aqueduct (CRA) owned by Metropolitan. Metropolitan’s water is a supplemental supply for its member agencies, most of whom have other sources of water. Metropolitan is comprised of 26 member public agencies: 11 municipal water districts, 14 cities, and one county water authority. The municipal water districts include Calleguas, Las Virgenes, Central Basin, Orange County, Eastern, Three Valleys, Foothill, West Basin, Inland Empire Utilities Agency, Upper San Gabriel Valley, and Western of Riverside County. The cities are Anaheim, Los Angeles, Beverly Hills, Pasadena, Burbank, San Fernando, Compton, San Marino, Fullerton, Santa Ana, Glendale, Santa Monica, Long Beach, and Torrance. The county water authority is San Diego. Its service area covers about 5,200 square miles and 300 cities and unincorporated communities and portions of the six counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura, an area with a population of 18.8 million people as of 2016 and the six counties have a gross domestic product larger than all but 11 countries. Metropolitan historically has provided 40% to 60% of the water used annually in its service area.