Glendale, California, issued $166.7 million in bonds to finance the development of two renewable power projects.
The bonds mature between 2025 and 2054, yielding between 2.58% and 3.73%. They pay interest at 5%. The securities received a rating of A+ from Fitch Ratings and A+ from S&P Global Ratings.
Glendale Water and Power (GWP), the city’s electricity utility, will use the proceeds to fund projects at Grayson Power Plant and the Scholl Canyon Landfill.
“Both projects are integral to GWP’s resource plan to provide a diversified and reliable resource portfolio while also achieving California’s renewable and clean energy goals,” Fitch analysts wrote.
The Grayson project involves replacing “aged, unreliable, inefficient, and high maintenance equipment,” at a natural gas-powered plant, according to a city government website. The new equipment will be more effective at preserving energy, making it more sustainable. But it will still run on natural gas, which is less sustainable than renewable technologies like wind and solar.
The Scholl Canyon project involves harnessing the biogas emissions from the landfill and turning them into energy.
This is the second of three planned debt issuances to fund the two projects, which are estimated to cost $610 million. In February, Glendale sold $219 million in bonds to support them.
Glendale is a city in Los Angeles County with a population of 190,000 people. The bonds are limited obligations of the city, payable by net revenue from its electricity system.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $187.6 million. The price reflected a premium of about $21 million. PFM Financial Advisors LLC acted as municipal advisor.