Oklahoma’s Grand River Dam Authority issued $349.2 million in bonds to finance more efficient energy infrastructure.
The authority sold $283.9 million in tax-exempt bonds and $65.3 million in federally taxable bonds. The tax-exempt bonds mature between 2025 and 2042, yielding between 3.03% and 3.63%. The taxable bonds mature between 2027 and 2034, yielding between 4.769% and 4.942%. The securities received a rating of A1 from Moody’s Investors Service and AA- from S&P Global Ratings.
The rating “considers the strong cash flow visibility derived from the sale of electricity to creditworthy wholesale customers primarily under long-term contractual arrangements,” Moody’s analysts wrote.
They added that the rating incorporates that authority’s “unencumbered ability to set electric rates, its favorable mix of low cost generating capacity that results in competitively priced electricity and robust historical financial performance.”
The Grand River Dam Authority generates electricity primarily from its three hydroelectric facilities and from a coal-fired facility that it is converting to natural gas. It sells that electricity to Oklahoma municipalities.
The authority will use the bond proceeds to fund the replacement of its last remaining coal-powered generator with a natural gas-fired unit. The proceeds add to $205 million in bonds that the authority sold for the same purpose last December.
The authority will also use the money from the issuance to refund bonds that it sold in 2014.
The bonds are special obligations of the authority, backed by its revenue.
Goldman Sachs & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $386.1 million. The price reflected a premium of more than $37 million. PFM Financial Advisors LLC acted as municipal advisor.