The Long Island Power Authority (LIPA) issued $1 billion in bonds to finance capital improvements and refund previously issued securities.
The authority sold the bonds in two series. The Series 2024A bonds, consisting of $717 million, mature between 2025 and 2054, yielding between 2.6% and 3.73%. The Series 2024B bonds, consisting of $$288.5 million, mature in 2049 and yield between 3.2% and 3.25%.
The securities received an underlying rating of A+ from Fitch Ratings, A2 from Moody’s Investors Service, and A from S&P Global Ratings. They are expected to receive insured ratings of A1 from Moody’s and AA from S&P. Fitch upgraded LIPA from A.
Fitch analysts wrote that their upgrade “reflects LIPA’s improved leverage ratio” and their “expectation that the gradual but consistent deleveraging trend that began in 2015 will continue through 2028.”
LIPA has been borrowing less in recent years, in part because it has been using new issuances to retire old ones. The authority will use the issuance proceeds to refund bonds that it sold in 2014 and 2019.
LIPA is a state authority that distributes electricity to Long Island, which is home to some 40% of New York’s population. The bond proceeds will support system improvements in addition the refunding.
The bonds are special obligations of LIPA, payable by electric system revenue.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds with a discount of $4.4 million. PFM Financial Advisors LLC acted as municipal advisor.