The California Community Choice Financing Authority (CCCFA) sold $1.1 billion in bonds to buy a long-term supply of electricity.
The bonds mature between 2028 and 2054, yielding between 3.91% and 4.15%. The securities received a rating of A1 from Moody’s Investors Service.
CCCFA will use the bond proceeds to purchase a 30-year supply of electricity from a commodities trader, Morgan Stanley Energy Structuring, LLC. The authority will sell that energy in turn to Silicon Valley Clean Energy Authority (SVCE), which supplies electricity to 13 member communities in northern California.
“SVCE offers carbon-free power at stable rates, significantly reducing energy-related greenhouse gas emissions and enabling millions of dollars of reinvestment in local energy programs,” the official statement accompanying the sale of the bonds reads.
Founded in 2021, CCCFA provides electricity to member municipalities across California. The authority is now the third-largest issuer of bonded debt in the United States, after the states of California and New York; CCCFA issued $5.5 billion in bonds last year.
The bonds are special limited obligations of CCCFA, payable by revenue from electricity sales.
Morgan Stanley & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $1.16 billion. The price reflected a premium of $64 million. PFM Financial Advisors LLC acted as financial advisor.