The Santee Cooper Board of Directors has approved a significant financial move, issuing approximately $1 billion in bonds to fund capital improvements and refinance existing debt. This decision, made on Wednesday, aims to enhance the utility's infrastructure while providing substantial savings for customers. The refinancing portion totals $421 million, targeting debts from 2014 and 2015, with an expected gross debt service saving of around $41 million by 2048. Additionally, the bond issuance includes $542 million in tax-exempt bonds and $58 million in taxable bonds. Officials anticipate a net present value savings exceeding $27 million, representing nearly 6% of the refunded bonds' par amount. The funds will be directed towards upgrading transmission, generation, and distribution systems, as well as ensuring environmental compliance.
Recent developments have paved the way for this successful bond offering. Following improved credit ratings from two major agencies and a settlement agreement with customers—pending court approval—Santee Cooper was able to proceed with confidence. These advancements allowed the utility to secure strong investor interest, with orders totaling over $8 billion. Chief Financial and Administrative Officer Ken Lott highlighted the positive outcomes, noting that the strong investor response enabled increased new money and savings, benefiting all Santee Cooper customers.
The transaction also boasts an all-in-true interest cost of 4.46%, further emphasizing its financial prudence. With these funds, Santee Cooper can now focus on critical upgrades to its infrastructure, ensuring reliable services and environmental standards are met. Moreover, the refinancing effort is expected to provide long-term financial relief to customers through reduced debt service costs.
This strategic move not only addresses immediate capital needs but also positions Santee Cooper for future growth and stability. By leveraging improved credit ratings and securing robust investor support, the utility has demonstrated its commitment to enhancing operations and delivering cost-effective services to its customer base. The successful bond issuance underscores Santee Cooper's proactive approach to managing its financial obligations while prioritizing the well-being of its customers.
