Burlington, Kansas, issued $79.5 million in bonds for a local energy provider to refund securities it sold to make environmental improvements.
The bonds mature on March 1, 2045, with a mandatory tender date on June 1, 2026. They pay interest at 4.3%. The securities received a rating of A2 from Moody’s Investors Service and A+ from S&P Global Ratings.
The city is loaning the bond proceeds to Evergy Metro Inc, a Kansas Energy utility. On November 29, S&P downgraded Evergy’s rating from A+ to A.
“The downgrade reflects weaker financials and an expectation of ongoing weaker financial measures through 2026,” S&P analysts wrote.
While the bonds will not add to Burlington’s debt outstanding, the issuance marks a transaction of significant scale for the small city in southeastern Kansas. The city’s annual budget for expenditures is around $2 million, and it had about $10 million in general obligation debt outstanding as of 2021.
Evergy will use the bond proceeds to refund securities it issued in 1983 and 1993.
Burlington is a city of just 2,000 people about 100 miles southwest of Kansas City. Evergy operates a nuclear power plant in Burlington. The bonds are limited obligations of Burlington, payable by Evergy’s rental payments to the city.
BofA Securities, Inc served as underwriter on the issuance, purchasing the bonds for par.