Municipality Sells $180 Million of Bonds for Municipal Light & Power, Refunding Bonds Lock in $40 Million Savings for Ratepayers
The Municipality’s sale of $180 million of revenue bonds for Municipal Light & Power (ML&P) this week was a great success as interest rates continue to remain low. Retail orders were in excess of $52 million while Alaskans purchased $9 million of the bonds.
This bond issue was rated A+ by Standard & Poor’s and A+ by Fitch and has maturities from two to thirty years. ML&P is a strong credit recognized nationwide by investors. The overall cost of funds for this transaction was 3.83%.
The Municipality’s bond issue consisted of $11 million of refunding bonds to refund a portion of ML&P’s outstanding 2005 bonds achieving a savings of $1.7 million for ratepayers.
The additional $169 million of refunding bonds were used to refund outstanding commercial paper program notes for ML&P. These notes were being used as a short term interim financing tool that has saved ML&P ratepayers nearly $40 million since 2011.
“The success of this second bond issue within two weeks again demonstrates high investor confidence in the strength of our economy and my administration’s conservative financial management principles.” Mayor Sullivan said. “I want to congratulate our finance team. Their strategic use of commercial paper and the ML&P refunding program have resulted in a tremendous savings for ratepayers.”