The Los Angeles, California, Department of Water and Power sold $275.6 million in bonds to refund previously issued securities.
The bonds mature between 2036 and 2039, yielding between 2.6% and 2.9%. They pay interest at 5%. The securities received a rating of Aa2 from Moody’s Investors Service, AA- from S&P Global Ratings, and AA from Kroll Bond Rating Agency.
“The Aa2 rating reflects key underlying fundamental strengths including its self-regulation and monopolistic provision of essential electricity to a sizeable and diverse customer base,” Moody’s analysts wrote.
The department will use the issuance proceeds to refund bonds it sold in 2010. The department sold an additional $372.5 million in Series 2024 bonds earlier this month.
The LA Department of Water and Power provides electricity to almost 4 million people in southern California. The bonds are special obligations of the department, payable by power system revenue.
Electricity sales generated $5 billion in revenue for the department last fiscal year, according to the official statement accompanying the sale of the bonds. That marked a 20% increase from 2019, when electricity sales yielded $4 billion in revenue, according to the bond documents.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $327 million. The price reflected a premium of $52 million. Public Resources Advisory Group acted as financial advisor.