The Southern California Public Power Authority (SCPPA) issued $562.9 million in bonds to finance the upgrade of a transmission line that runs from Utah to California.
The bonds mature between 2025 and 2053, yielding between 2.65% and 4.08%. They received a rating of AA- from Fitch Ratings and Aa2 from Moody’s Investors Service.
The authority will use the bond proceeds to fund a transmissions project that will facilitate the supply of cleaner energy to southern California. The origin of the transmission line, in Utah, is being switched from a coal-fired power plan to one powered by natural gas and hydrogen.
Fitch analysts said their rating reflected the credit quality of the Los Angeles Department of Water and Power (LADWP), the largest purchaser for the project. They added that the rating also reflects the terms of the contracts for all power transmission sales. Moody’s analysts wrote that their rating reflects the importance of the project to its participants.
SCPPA is a joint powers authority that owns electricity and gas assets on behalf of its twelve members, including LADWP. The bonds are special, limited obligations of the authority, payable by SCPPA revenue from the project, which the authority expects to primarily come from LADWP and the cities of Burbank and Glendale.
Barclays Capital Inc served as lead underwriter on the issuance, purchasing the bonds for $625 million. The price reflected a premium of $63.3 million and a discount of $1.1 million. PFM Financial Advisors LLC acted as municipal advisor.