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Nashville Sells $367 Mln in Electricity Bonds

By Munichain News Desk

The Metropolitan Government of Nashville and Davidson County issued $366.7 million in bonds to make improvements to the Nashville Electric Service (NES).

The government sold the bonds in two series. The 2024 Series A bonds, consisting of $244.3 million, mature between 2025 and 2049, yielding between 2.55% and 3.89%. The 2024 Series B bonds, consisting of $122.4 million, mature between 2025 and 2039, yielding between 2.55% and 3.26%. The securities received a rating of Aa1 from Moody’s Investors Service and AA+ from Fitch Ratings.

The rating “reflects the electric system’s strong regional service area and customer base with modest customer concentration and well managed financial operations with solid debt service coverage,” Moody’s analysts wrote.

The bond proceeds will finance the expansion and improvement of the NES transmission and distribution system. The service provides electricity to more than 450,000 customers, most of whom are residential.

Davidson County is the second-most populous in Tennessee and includes Nashville and its surrounding suburbs. The bonds are limited obligations of the city and county’s metropolitan government, payable by electricity system revenue. The system generated $1.5 billion in net operating revenue last fiscal year, according to the official statement accompanying the sale of the bonds.

Raymond James & Associates, LLC served as lead underwriter on the issuance, purchasing the bonds for $412 million. The price reflected a premium of more than $46 million. PFM Financial Advisors LLC acted as financial advisor.  

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