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Latina-owned firm leads state’s first green bond sale


   The Metropolitan Water Reclamation District of Greater Chicago became the first government agency in the state to raise money with “green bonds” this winter. The financial firm that handled the sale? AC Advisory, founded by Colombian native, Adela Cepeda.

 Cepeda has advised the Water Reclamation District through a number of bond sales over more than a decade of working with the agency. This one raised $300 million for a number of environmentally friendly projects as well as refinancing. Cepeda considers it an honor to have been involved.

   “It was a tremendous opportunity to help bring forth the first green bond sale in the State of Illinois,” Cepeda said. “At a time when the state’s credits are challenged, to bring a sale that is opening up a new market means a great deal to my firm.”

   Green bonds offer a way for municipalities to attract investors who may not have been interested in government bonds before but are pulled in by the promise of funding sustainability projects. In the case of the Water Reclamation District, Commissioner Frank Ávila said the bulk of the $300 million will go toward three main projects. One-third of it will fund work on the Tunnel and Reservoir Plan, a two-pronged effort to protect Lake Michigan — and the region’s drinking water — from contamination. Another $50 million will fund the district’s stormwater management program, which helps municipalities address flooding. And $75 million is for the district’s resource recovery efforts. That means turning human waste into useful byproducts for use within the district and, perhaps eventually, for sale.

 The final portion of the bond revenue will cover refinancing, saving taxpayers a couple million dollars over the life of the district’s existing debt.

 Massachusetts first raised revenue with green bonds two years ago, becoming a model for state and local governments nationwide. Cepeda’s firm handled a green bond sale for the State of Connecticut since then and encouraged the water reclamation district to join the trend.

 “As soon as Massachusetts did it, this became an attractive option to expand the investor base,” Cepeda said.

  Besides the ethical incentive to support environmentally friendly projects, many investors continue to be drawn to the Water Reclamation District for its reliability. The district’s latest bond sale came with AAA outlooks from Fitch Ratings and Standard & Poor’s. Moody’s Investors Service did not rate the green bonds in the latest sale and, while it downgraded the district from its top credit rating in 2013, the other two agencies have continued to give it high marks across the board. For investors, the district generally remains a safe bet.

  And at the Water Reclamation District, Cepeda continues to be an important advisor. Ávila said she has helped the district market its bond sales and set the timing for the best interest rates.

  “Adela is an excellent consultant and highly educated in the financial market,” Ávila said, “especially in the bond dealings with municipal bonds.”

  The Water Reclamation District raised revenue from its debt issuance this past December. Many elements of its sustainability projects are already underway.