As part of its ongoing effort to reduce debt costs for customers, the Santee Cooper Board of Directors recently approved a $1.3 billion tender and exchange bond refunding that is expected to produce gross savings of nearly $400 million over the life of the bonds.
Santee Cooper, the state-owned public power utility in South Carolina, offered to tender or exchange $2.7 billion in bonds on Jan. 18, 2022. The offer received a strong 48% participation rate.
The board approved the sale of approximately $931 million of 2022 Tax-Exempt Refunding Series A to tender $943 million of outstanding high-coupon bonds and approximately $352 million of 2022 Tax-Exempt Refunding Series B to exchange for outstanding high-coupon bonds
The transaction has an all-in total interest cost of 3.31%. Santee Cooper’s final acceptance of the tender and exchange offers is contingent on closing on the 2020AB Series, which is scheduled for Feb. 23, 2022.
The deal is projected to produce approximately $378 million in gross savings (about $11 million a year), which results in approximately $250 million in net present value debt service savings.
Moody’s, S&P, and Fitch credit rating agencies all reaffirmed their ratings and stable outlook for Santee Cooper.