The city of Lakeland, Florida, sold $154.5 million in bonds to finance improvements to its electric power system and refund a previous issuance.
The bonds mature between 2029 and 2048, yielding between 3.15% and 4.57%. They received a rating of AA from Fitch Ratings and AA from S&P Global Ratings.
The rating reflects the “expectation that the system will continue to maintain its historically stable financial performance amid an expanded capital plan,” according to Fitch.
The bond proceeds will finance transmission and distribution projects aimed at enhancing the city’s electric grid and the installation of new power generating assets scheduled to come online next year.
The issuance comes as the city retires coal-powered plants in favor of more sustainable energy sources. The new power generation units will run on natural gas, which is significantly cleaner than coal despite still being a fossil fuel. They will also have the capacity to generate up to a quarter of energy output using hydrogen fuel, though hydrogen is still too expensive for the city to use it as a fuel source, according to the official statement accompanying the sale of the bonds.
The bonds will also refund all of the city’s variable rate energy system refunding bonds, Series 2022.
Lakeland is a city in central Florida with a population of more than 100,000 people. The bonds are limited obligations of the city, payable by the revenue of the city’s electric utility.
Wells Fargo Bank, NA, and Truist Securities, Inc served as underwriters on the issuance, purchasing the bonds for more than $167 million. The price reflected a premium of $13 million.