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Georgia Gas Company Sells More Than $1 Billion in Bonds

By Munichain News Desk

A nonprofit gas distributor in Georgia issued $1 billion in bonds to refund a previous issuance and prepay for natural gas it will deliver for the next 30 years.

The Main Street Natural Gas Company sold the bonds in two sub-series. The Sub-series 2023E-1 bonds, consisting of $754 million, mature between 2023 and 2053, yielding between 4.3% and 4.61%. The Sub-series 2023E-2 bonds, consisting of $250 million, mature on December 1, 2053, and are indexed to the SOFR rate. The bonds are subject to a mandatory tender on June 1, 2031, and received a rating of Aa1 from Moody’s Investors Service.

The rating takes into account “the structure and mechanics of the transaction which provide for the payment of debt service consistent with the rating assigned to the Bonds,” Moody’s analysts wrote.

The company will deposit almost all of the bond proceeds into an escrow account to refund Series 2018 bonds that carry a mandatory tender on December 1 of this year. The company will use the remaining proceeds, about $11 million, to pre-pay the Royal Bank of Canada for deliveries of natural gas. It will then distribute the gas to municipalities throughout the Southeast, though primarily in Georgia and Alabama.

Main Street Natural Gas Company is a component of the Municipal Gas Authority of Georgia, a public corporation required by law to provide its members with a “reliable and economic” gas supply. The bonds are special, limited obligations of the Main Street Natural Gas Company, payable by revenue from gas sales.

RBC Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds for $1.02 billion. The price reflected an original issue premium of $18 million.

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