The Utah Infrastructure Agency (UIA) issued $35.6 million in bonds to finance the development of a statewide telecommunications network.
The bonds mature between 2025 and 2047, yielding between 4.92% and 6%. They received a rating of BBB- from Fitch Ratings, which assigned a negative outlook.
“The ‘BBB-‘ ratings and maintenance of the Negative Outlook continue to reflect Fitch’s expectation that UIA’s nonconsolidated leverage (leverage that excludes non-recourse debt issued on behalf of certain municipalities in Utah) will improve but remain weak through 2024,” Fitch analysts wrote.
The bond raise comes amid nationwide efforts to increase rural access to telecommunications services. In June, President Joe Biden announced $42 billion in new federal funding to expand high-speed broadband across the United States. The measure is part of a proposal to ensure the entire country has broadband access by the end of the decade.
Utah performs relatively well on broadband access. The state ranks 13th in annual ranking of internet coverage, speed, and reliability compiled by BroadbandNow, a broadband data aggregation firm. However, only about half of state residents have access to fiber-optic services, which create the fastest internet connections.
The issuance follows the expansion of the fiber-optic network deployed by the related Utah Telecommunication Open Infrastructure Agency (UTOPIA). Much of that expansion was funded by $48 million raised by the UIA in 2019.
The UIA is a consortium of nine cities in Utah that deploys telecommunications services. The bonds are special limited obligations of the agency, payable by its revenue.
KeyBanc Capital Markets Inc served as underwriter on the issuance, purchasing the bonds for close to par.