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SRP plans $436M bond sale to fund electric system improvements

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Essential Energy Insights - January 2021


SRP plans $436M bond sale to fund electric system improvements

Salt River Project, or SRP, plans to sell $436 million of 2019 series A public power revenue bonds to finance capital improvements to its electric system, the utility said Oct. 16.

The sale was prompted by S&P Global Ratings' decision to raise its rating on SRP's $3.9 billion of senior-lien debt from AA to AA+.

"The upgrade reflects a very strong enterprise profile and an extremely strong financial profile; fixed charge coverage metrics that have consistently been extremely strong and that we expect to remain so; and the availability of unrestricted, segregated funds that provide flexibility that enhances our assessment of liquidity as very strong," said David Bodek, credit analyst at S&P Global Ratings, in an Oct. 11 research note.

SRP plans to price the offering the week of Oct. 21, subject to market conditions. The sale, which still needs approval from the SRP board and ratification by its council, is expected to close Nov. 6.

J.P. Morgan will manage the sale alongside co-managers Goldman Sachs & Co., Bank of America Merrill Lynch, Citigroup and Morgan Stanley. PFM will act as financial adviser and Chiesa Shahinian & Giantomasi as bond counsel.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.