The California Community Choice Financing Authority (CCCFA) sold $647.8 million in bonds to prepay for a supply of clean energy.
The securities are term bonds maturing on October 1, 2054, and yielding 5.07%. They have a mandatory tender date of November 1, 2030. The bonds received a rating of Aa3 from Moody’s Investors Service.
The authority expects that prepayment will reduce the costs of clean energy procurement until the tender date.
“CCCFA will take advantage of this structure to increase the amount, and reduce the cost, of clean energy on the California grid, combating climate change and fulfilling customers’ needs for non-polluting resources,” the authority’s website reads.
California lawmakers have recently upped the pressure on state authorities to increase their supply of renewable energy in the wake of increasing extreme weather events. The state has a commitment to reach 100% clean energy by 2045.
The bond proceeds will prepay for clean energy for Central Coast Community Energy (3CE), which supplies energy in Monterey, San Benito, San Luis Obispo, Santa Cruz, and Santa Barbara counties. 3CE expects to source 100% of its energy from clean sources by 2030, according to its website.
The bonds are special limited obligations of the authority, payable by clean energy revenue. CCCFA previously issued almost $1 billion in clean energy bonds in August.
Goldman Sachs & Co LCC served as underwriter on the issuance, purchasing the bonds for $660.5 million. The price reflected a premium of $16.3 million and a discount of $3.6 million.