Glendale, California, issued $219.5 million in bonds to finance two major projects for its electric system.
The city sold the bonds in two series. The first series of bonds, consisting of $166.9 million, mature between 2025 and 2054, yielding between 2.26% and 3.7%. The second series of bonds, consisting of $52.6 million, mature between 2025 and 2043, yielding between 2.26 and 3.25%. All of the bonds pay interest at 5%. The securities received a rating of A+ from Fitch Ratings and A+ from S&P Global Ratings.
Proceeds from the first set of bonds will fund upgrades to the city’s electric system. These improvements include rehabilitating the Grayson Power Plant, an aging natural-gas powered facility, and building the so-called School Canyon Project, a renewable energy plant powered by biofuels. Proceeds from the second set of bonds will refund securities the city sold in 2013.
The rating reflects “Glendale’s large planned capital investment in the Grayson power plant repowering project and the Scholl Canyon Project, and the expected impact to leverage and the utility’s financial profile,” Fitch analysts wrote.
The city projects that the two projects will cost about $600 million and be completed by 2027. The city plans to issue additional bonds to fund the projects in the next two fiscal years.
To support these costs, the city plans to raise rates for its electric system. Rates in July 2025 will be 42% higher than they were two years earlier, according to Fitch.
Glendale is a city of about 200,000 people in Los Angeles County. The bonds are special, limited obligations of the city, payable by revenue from its electric system.
Morgan Stanley & Co LLC served as lead underwriter on the first series of bonds. BofA Securities, Inc served as lead underwriter on the second series. PFM Financial Advisors LLC acted as financial advisor.