Sky Ranch Metropolitan District No. 1 Secures Investment Grade Rating 'BBB'

Sky Ranch Metropolitan District No. 1 (District No. 1), a member of the Sky Ranch Community Authority Board (Sky Ranch CAB), has received an investment grade rating of 'BBB' from S&P Global Ratings for the refinancing of its 2019 bonds. This rating reflects the district's mature status, the quality of its financial controls, and its stable financial outlook. Pure Cycle Corporation (NASDAQ: PCYO), the developer of the Sky Ranch Master Planned Community, is pleased with this development, as it will lower the borrowing cost of District No. 1 and allow for additional net funds to repay Pure Cycle's advances in constructing public improvements at Sky Ranch.

The 'BBB' rating indicates that District No. 1 has a strong capacity to meet its financial commitments, and it is a testament to the professional stewardship of Pure Cycle in managing the Sky Ranch CAB and the Sky Ranch Master Planned Community. The transaction is expected to price and close in November, yielding approximately $10 million in additional funds to pay down the Sky Ranch CAB Note Receivable.

Pure Cycle continues to grow and strengthen its operations, balance sheet, and recurring revenues. The company operates in three distinct business segments: wholesale water and wastewater services, land development, and single-family home rentals. The receipt of the investment grade rating and the successful refinancing of the 2019 bonds will further enhance Pure Cycle's financial position and its ability to secure future financing.

The lower borrowing cost from the investment-rated bond will benefit Pure Cycle's cash flow by reducing interest expenses and increasing available funds for other purposes. This will improve the company's financial flexibility and its ability to invest in growth opportunities.

The refinancing is expected to have a positive long-term impact on Pure Cycle's debt-to-equity ratio by reducing its debt obligations and improving its overall financial health. This will make the company more attractive to investors and enhance its ability to secure future financing at favorable terms.

The additional funds from the refinancing will be allocated towards repaying Pure Cycle's advances in constructing public improvements at Sky Ranch. This will help the company recoup its investments in the development of the Sky Ranch Master Planned Community and improve its return on investment.

The investment grade rating and successful refinancing of the 2019 bonds will also have a positive impact on Pure Cycle's ability to secure future financing and maintain its investment-grade rating. The strong financial position of District No. 1 and the stable financial outlook of Sky Ranch CAB will make the company more attractive to lenders and investors, allowing it to access capital at favorable terms.

In conclusion, the receipt of the investment grade rating and the successful refinancing of the 2019 bonds by Sky Ranch Metropolitan District No. 1 is a significant achievement for Pure Cycle Corporation. This development will enhance the company's financial position, improve its cash flow, and strengthen its ability to secure future financing. The successful refinancing will also help Pure Cycle recoup its investments in the development of the Sky Ranch Master Planned Community and improve its return on investment.