Strong Investor Interest Produces Successful Bond Sale to Refinance Debt, Meet New Capital Needs
Refunding Will Save Customers Approximately $180 million
MONCKS CORNER, S.C. – Advancing its strategic debt management plan, the Santee Cooper Board of Directors today approved the sale of approximately $865 million in bonds to refinance debt issued in 2013 and 2014. The transaction will achieve approximately $180 million in gross savings for customers through 2054. This equates to net present value savings of 11%, or over $100 million.
The Board also approved the sale of approximately $445 million in revenue bonds to finance capital needs on the Santee Cooper system related to transmission, generation and distribution improvements and environmental and regulatory compliance.
Specifically, the Board approved:
- $372 million 2024 Tax-Exempt Improvement Series A
- $865 million 2024 Tax-Exempt Refunding Series B
- $73 million 2024 Taxable Improvement Series C
The all-in true interest cost is 4.55%. The improvement transactions fall within approved parameters of the South Carolina Joint Bond Review Committee; JBRC approval is not required for refundings that produce savings.
The transaction received strong investor demand, with investor orders totaling over $6.2 billion. The oversubscription allowed Santee Cooper to increase the bond offering and reduce interest rates on every single bond maturity offered.
“Today’s transaction represents a tremendous response with tremendous savings for our customers in terms of the refunding. It will also enable us to invest in upcoming capital projects to improve transmission reliability, protect the resiliency of our generating stations, and fund ongoing capital environmental investments.,” said Santee Cooper President and CEO Jimmy Staton. “We appreciate the guidance and support of the SC Joint Bond Review Committee that contributed to this outstanding outcome.”
The transaction was led by J.P. Morgan Securities. Other senior managers were Bank of America Securities and Barclays Capital Inc. Co-managers included Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, TD Securities (USA) LLC, Wells Fargo, and Academy Securities, a veteran-owned and operated investment bank designed to support veterans transitioning into the corporate workplace.
Financial advisors to the transaction noted that Santee Cooper’s transaction is a highlight among many in the market this week, a reflection of the utility’s commitment to transparency with investors and recent upgrades to its credit outlook by Fitch and Moody’s rating agencies. Kevin Plunkett with JP Morgan noted the transaction received orders from 90 different investors, “including some of the largest money managers in the world.” That strong response produced even more favorable terms as the pricing progressed, the advisors noted.
