As much as $3 billion of Oklahoma utility debt related to Winter Storm Uri, which hammered the Southwest in 2021, will begin hitting the market as early as July after winning state court approval.
The Oklahoma Supreme Court last week validated three remaining securitization issues totaling about $2.2 billion after approving up to $800 million of bonds for the Oklahoma Gas and Electric Company
The high court gave the green light to up to $1.45 billion of bonds for the Oklahoma Natural Gas Company, up to $725 million of bonds for the Public Service Company of Oklahoma, and up to $95 million of bonds for Summit Utilities Oklahoma.
Michael Davis, president and CEO of the Oklahoma Development Finance Authority, the conduit issuer for the bonds, said on Tuesday that a mid- to late-July pricing was being eyed for the OG&E deal. He added that the remaining three issues are expected before the end of 2022.
The taxable bonds were made possible by legislation passed in Oklahoma last year that
The securitizations are limited to Uri-related fuel costs for utilities that fall under the Oklahoma Corporation Commission’s oversight.
For the OG&E deal, RBC Capital Markets is the lead manager and Wells Fargo is co-senior manager, according to the authority. RBC is also the lead manager for the Public Service Company deal. Citigroup is co-senior manager on that deal and the lead manager for the Summit Utilities bonds.
JPMorgan was tapped to lead the Oklahoma Natural Gas Company deal, with Goldman Sachs & Co as co-senior manager.
Like the OG&E debt, the authority’s petition to validate the Oklahoma Natural Gas Company bonds was challenged by individual residents mainly on constitutional grounds. The other two bond issues did not attract any opposition, according to court documents.
“We assume original jurisdiction and hold the ratepayer-backed bonds were properly authorized under the act and are constitutional,” the court concluded in its initial opinions.
