City Utilities of Springfield, Mo., will save customers approximately $1.3 million each year by refunding its revenue bonds and issuing new bonds at a lower interest rate, the public power utility said on June 27.
The refinancing applies to bonds originally issued in 2006 for the construction of Unit 2 at the John Twitty Energy Center, a 300-megawatt coal-fired power generation facility.
The bonds, originally issued at $615 million, were eligible for refunding every 10 years with approval from both the Board of Public Utilities and Springfield City Council. The Board approved the refinancing in February, followed by Council approval in March.
Due to market volatility this spring, City Utilities waited to finalize the timing of the issuance to ensure the best financial outcome.
The new bonds were officially issued on June 18, and the savings will begin in 2026. The remaining debt on the bonds is $307 million and is scheduled to be paid off in 2036.
City Utilities’ strong credit ratings played a key role in the successful bond issuance, it noted. The utility maintains high marks from two major credit rating agencies on our revenue bonds: ”AA” from Fitch Ratings and “AA+” from S&P Global -- some of the highest ratings awarded to public utilities.
"These ratings reflect City Utilities’ financial stability and prudent management, and they allow the utility to take advantage of favorable financing opportunities," the utility noted.
"This refinancing effort is one of the many strategies City Utilities employs to ensure long-term affordability and value for its customers while continuing to provide safe, reliable services to the Springfield community," the utility said.
