California Water Service Group Sells $170 Million of Senior Unsecured Notes and California Water Service Company Sells $200 Million of First Mortgage Bonds

Rhea-AI Summary

California Water Service Group (NYSE: CWT) has announced the successful sale of $370 million in debt securities through two separate transactions. The company sold $170 million in Senior Unsecured Notes split between $70 million at 4.87% due 2032 and $100 million at 5.22% due 2035, receiving an "A" rating from S&P Global.

Additionally, its subsidiary California Water Service Company issued $200 million in First Mortgage Bonds at 5.64% maturing in 2055, rated "AA-" by S&P. Both offerings closed on October 1, 2025, with proceeds intended for refinancing existing debt and general corporate purposes.

Positive

• Strong credit ratings: 'A' rating for Senior Notes and 'AA-' for Mortgage Bonds from S&P Global
• Successful placement of $370 million in total debt financing
• Long-term debt maturities ranging from 2032 to 2055 provide financial stability
• Strategic refinancing to manage existing debt obligations

Negative

• Increased debt load could impact future financial flexibility
• Higher interest rates (4.87% to 5.64%) compared to historical rates
• Additional semi-annual interest payment obligations

Insights

Fixed Income Analyst

CWT secured $370M in well-rated debt with favorable terms, strengthening its financial position for infrastructure investments.

California Water Service Group has completed a significant $370 million debt financing through two separate transactions. The parent company (CWT) issued $170 million in Senior Unsecured Notes split between $70 million at 4.87% due 2032 and $100 million at 5.22% due 2035. These notes received a solid "A" rating from S&P Global, indicating strong creditworthiness. Simultaneously, its subsidiary California Water Service Company issued $200 million in First Mortgage Bonds at 5.64% maturing in 2055, which received an even stronger "AA-" rating.

The debt structure reveals a thoughtful approach to the company's capital management. The parent company's notes have shorter maturities (7-10 years) with lower interest rates, while the subsidiary's bonds extend to 30 years with a slightly higher rate, reflecting the longer duration. This laddered approach to debt maturities helps manage refinancing risk over time.

The higher rating on Cal Water's bonds (AA- vs A) reflects the additional security provided by property liens, making these bonds safer for investors. The semi-annual interest payment schedule for both issuances is standard for corporate debt and provides predictable cash flow requirements.

Most importantly, the successful placement of these notes and bonds at these interest rates demonstrates market confidence in CWT's financial stability. The company intends to use these proceeds primarily to refinance existing debt rather than for expansion, suggesting a focus on optimizing its capital structure rather than aggressive growth. This refinancing likely allows the company to lock in current rates and potentially extend maturities on existing obligations, providing greater financial flexibility for infrastructure investments and regulatory compliance in its regulated utility operations across five states.

SAN JOSE, Calif., Oct. 01, 2025 (GLOBE NEWSWIRE) -- California Water Service Group (Group, NYSE: CWT) today announced today the sale of $170,000,000 in aggregate principal amount of Senior Unsecured Notes (the Notes) by Group and $200,000,000 in aggregate principal amount of First Mortgage Bonds (the Bonds) by California Water Service Company (Cal Water), a wholly owned subsidiary of Group, in private placement transactions. 

The Notes consist of $70,000,000 of 4.87% senior unsecured notes, Series A, due October 1, 2032 and $100,000,000 of 5.22% senior unsecured notes, Series B, due October 1, 2035. The Notes received an “A” rating by S&P Global (S&P) in advance of the sale. The Bonds consist of $200,000,000 of 5.64% bonds, Series 3, maturing October 1, 2055. The Bonds have an S&P rating of “AA-.” The Notes and the Bonds closed on October 1, 2025.

Interest on the Notes will accrue semi-annually and be payable in arrears. The Notes will rank equally with Group’s indebtedness under its Credit Agreement, dated as of March 31, 2023, with Bank of America, N.A. and the other parties thereto. Interest on the Bonds will accrue semi-annually and be payable in arrears. The Bonds will rank equally with all of Cal Water’s other First Mortgage Bonds and will be secured by liens on its properties, subject to certain exceptions and permitted liens. 

Group plans to use the net proceeds from the sale of the Notes to refinance existing indebtedness and for general corporate purposes. Cal Water plans to use the net proceeds from the sale of the Bonds to refinance existing indebtedness and for general corporate purposes, as set forth in California Public Utilities Code Section 817.

Neither the Notes nor the Bonds have been registered under the Securities Act of 1933 and neither may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This announcement is neither an offer to sell nor a solicitation of an offer to buy any of the Notes or the Bonds. The matters discussed in this release include forward-looking statements. These statements are based on current expectations or beliefs and are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Group is providing this information as of the date of this news release and assumes no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this press release.

Group is the parent company of regulated utilities Cal Water, Hawaii Water Service, New Mexico Water Service, and Washington Water Service, as well as Texas Water Service, a utility holding company. Together, these companies provide regulated and non-regulated water and wastewater service to more than 2.1 million people in California, Hawaii, New Mexico, Washington, and Texas. Group’s common stock trades on the New York Stock Exchange under the symbol “CWT.” Additional information is available online at www.calwatergroup.com.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for “safe harbor” treatment established by the PSLRA. Forward-looking statements in this news release are based on currently available information, expectations, estimates, assumptions and projections, and our management’s beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like will, would, expects, intends, plans, believes, may, could, estimates, assumes, anticipates, projects, progress, predicts, hopes, targets, forecasts, should, seeks or variations of these words or similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results or outcomes may vary materially from what is contained in a forward-looking statement. Factors that may cause actual results or outcomes to be different than those expected or anticipated include, but are not limited to: the outcome and timeliness of regulatory commissions’ actions concerning rate relief and other matters, including with respect to the 2024 California general rate case (GRC); the impact of opposition to rate increases; our ability to recover costs; federal governmental and state regulatory commissions’ decisions, including decisions on proper disposition of property; changes in state regulatory commissions’ policies and procedures, such as the California Public Utilities Commission’s decision in 2020 to preclude companies from proposing full decoupling, which impacted the 2021 California GRC Filing; changes in California State Water Resources Control Board water quality standards; changes in environmental compliance and water quality requirements, such as the United States Environmental Protection Agency’s finalization of a National Primary Drinking Water Regulation establishing legally enforceable maximum contaminant levels (MCL) for PFAS in drinking water in 2024 as well as legal challenges to such MCLs; the impact of weather, climate change, natural disasters, including wildfires and landslides, and actual or threatened public health emergencies, including disease outbreaks, on our operations, water quality, water availability, water sales, and operating results and the adequacy of our emergency preparedness; electric power interruptions, especially as a result of public safety power shutoff programs; availability of water supplies; our ability to invest or apply the proceeds from the issuance of common stock in an accretive manner; consequences of eminent domain actions relating to our water systems; increased risk of inverse condemnation losses as a result of the impact of weather, climate change, and natural disasters, including wildfires and landslides; housing and customer growth; issues with the implementation, maintenance or security of our information technology systems; our ability to renew leases to operate water systems owned by others on beneficial terms; civil disturbances or terrorist threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats; the ability of our enterprise risk management processes to identify or address risks adequately; labor relations matters as we negotiate with the unions; changes in customer water use patterns and the effects of conservation, including as a result of drought conditions; our ability to complete, in a timely manner or at all, successfully integrate and achieve anticipated benefits from announced acquisitions; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on debt or pay dividends; risks associated with expanding our business and operations geographically; the impact of stagnating or worsening business and economic conditions, including inflationary pressures, general economic slowdown or a recession, changes in tariff policy and uncertainty regarding tariffs and other retaliatory trade measures, the interest rate environment, changes in monetary policy, adverse capital markets activity or macroeconomic conditions as a result of geopolitical conflicts; the impact of market conditions and volatility on unrealized gains or losses on our non-qualified benefit plan investments and our operating results; the impact of weather and timing of meter reads on our accrued unbilled revenue; the impact of evolving legal and regulatory requirements, including emerging environmental, social and governance requirements; the impact of the evolving U.S. political environment that has led to, in some cases, legal challenges and uncertainty around the funding, functioning, and policy priorities of the U.S. federal regulatory agencies and the status of current and future regulations; and other risks and unforeseen events described in our Securities and Exchange Commission (SEC) filings. In light of these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as the Annual Report on Form 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the SEC. We are not under any obligation, and we expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. A credit rating is not a recommendation to buy, sell or hold any securities, may be changed at any time by the applicable ratings agency and should be evaluated independently of any other information.

Contact
James P. Lynch
408-367-8200 (analysts)

Shannon Dean
408-367-8243 (media)

FAQ

What is the total value of debt securities sold by California Water Service Group (CWT) in October 2025?

California Water Service Group and its subsidiary sold a total of $370 million in debt securities, consisting of $170 million in Senior Unsecured Notes and $200 million in First Mortgage Bonds.

What are the interest rates and maturity dates for CWT's new debt securities?

The Senior Notes include $70 million at 4.87% due 2032 and $100 million at 5.22% due 2035. The First Mortgage Bonds are $200 million at 5.64% maturing in 2055.

What credit ratings did S&P Global assign to CWT's new debt offerings?

S&P Global assigned an 'A' rating to the Senior Unsecured Notes and an 'AA-' rating to the First Mortgage Bonds.

How will California Water Service Group use the proceeds from these debt offerings?

The company plans to use the net proceeds to refinance existing indebtedness and for general corporate purposes.