Main Street Natural Gas, Inc sold $836.6 million in bonds to prepay for a 30-year supply of natural gas to distribute to counties throughout the South.
The bonds mature between 2025 and 2054, yielding between 3.78% and 4.04%. They are subject to mandatory tender in 2034, and pay interest at 5%. The securities received a rating of Aa1 from Moody’s Investors Service.
The bond proceeds will fund Main Street Natural Gas’s purchase of 30 years worth of discounted gas from the Royal Bank of Canada (RBC). Main Street Natural Gas will in turn sell the gas to its member municipalities.
Main Street Natural Gas is managed by the Municipal Gas Authority of Georgia, a nonprofit natural gas supplier that is among the largest in the United States. The Gas Authority serves 83 member municipalities in Georgia, Alabama, Pennsylvania, Tennessee, and Florida, according to its website.
Natural gas is by far the largest component of Georgia’s energy mix. The fuel accounted for 45% of electricity generation in the state in 2021, according to the U.S. Energy Information Administration.
The bonds are special, limited obligations of Main Street Natural Gas, payable by natural gas revenue.
RBC Capital Markets, LLC served as underwriter on the issuance, purchasing the bonds for more than $883 million. The price reflected a premium of $51 million and a discount of $4.5 million. PFM Financial Advisors LLC acted as financial advisor.