San Antonio – June 29, 2016 – CPS Energy sold approximately $544.26 million of its electric and gas systems revenue refunding bonds in New York this week.
Proceeds from the sale of the bonds will be used to refund bonds previously issued in 2008 (new series 2008) and 2009 (new series 2009A), resulting in net present value debt service savings of $109.16 million, or 17.9%, of the bonds refunded.
“Our tax-exempt bonds were well received in the market due to our high credit ratings, reflecting this utility’s strong credit strength,” commented Senior Director of Finance and Treasury, Linda Dzierzanowski. “Because we were able to offer the community strong credit, the transaction was able to occur even though there was volatility in the market over the past week.”
Interim President & CEO, Paula Gold-Williams, was very pleased with the results, stating that “this transaction will reduce CPS Energy’s debt service and create savings, which is helpful to our community and our customers.”
The bonds received strong ratings, with a stable outlook, by each of the three main credit ratings agencies. The ratings are as follows:
- Fitch Ratings Inc.: “AA+”
- Moody’s Investors Service: “Aa1”
- Standard & Poor’s: “AA”
Dan Aschenbach, Senior Vice President at Moody’s, reported that “CPS Energy’s strong competitive and financial position were fundamental strengths.”
Moody’s report highlighted several other credit strengths, including:
- A large and broad service area with diverse economy,
- Significant rate competitiveness driven by fuel diversity and strong risk management,
- Progress on execution of renewable energy plan which represents a positive step regarding lowering carbon exposure,
- Strong risk management program which informs management and board of developing utility risks, and
- The City of San Antonio general obligation bonds, rated “Aaa”.
About CPS Energy
CPS Energy is the nation’s largest municipally owned natural gas and electric company, providing safe and affordable service to 786,000 electric and 339,000 natural gas customers in the Greater San Antonio area. With our AA+ credit rating, one of the best in the industry, we offer best in class reliability and some of the lowest rates among the top 10 largest U.S. cities. We recognize our role as a community partner and are continuously focused on job creation, economic development and educational investment. Powered by our people, our investment in the community is demonstrated through our employees’ generosity in giving $1.1 million to United Way. We are also committed to investing in clean energy. CPS Energy is number one in Texas for solar generation and among the top wind energy buyers in the nation for municipally owned utilities. For more information, visit newsroom.cpsenergy.com.