CPS Energy achieves lowest interest rates in 50 years on new bond issue
CPS Energy sold $200 million of its electric and gas systems junior lien revenue bonds at the lowest long-term interest rates the San Antonio utility has seen on a new money tax-exempt debt issuance in more than 50 years. Proceeds from the bond sale will be put toward capital improvement projects over the next 12-18 months, and will cover the cost of issuing the bonds.
"Our tax-exempt bonds were well received in the market which illustrates our credit strength," said Justin Locke, CPS Energy’s vice president of finance. "We’re fortunate that the demand for our bonds was greater than our supply." He explained that the market was tight, and that even though "we saw interest rates starting to rise during the day; we were able to get the transaction done at lower yields than other deals that were priced the same day." The bonds sold at a total interest cost of 4.16 percent.
The junior lien revenue bonds received strong ratings from the three main credit rating agencies. Standard & Poor’s cited CPS Energy’s "strong, growing service-area economy; very competitive electricity rates; economic, diverse-fuel generating capacity; strong financial metrics; and good management."
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