BRADENTON, Fla. — Kentucky's Louisville Water Co. received 11 bids for $63.2 million of triple-A rated advance refunding bonds that resulted in more savings than anticipated, officials said.
The deal priced Aug. 13, and obtained net present value of $6.9 million or 11% of par amount to be refunded. The savings will be taken within existing maturities between 2014 and 2031.
Before pricing, the net present value savings was estimated at $6.6 million or 10.7%.
The winning bidder on the competitive deal was Chicago-based Hutchinson, Shockey, Erley & Co. with a true interest cost of 2.68%.
Proceeds of the advance refunding bonds will be held in escrow until Nov. 15, 2016 when the eligible maturities of the utility's 2006 bonds will be called and refunded.
The offering "is a testament to our sound fiscal management which will save Louisville Water and its customers millions of dollars," said a statement from Amber Halloran, vice president of finance and treasurer. "Combined with the recent affirmation of high credit ratings, Louisville Water can continue its investment in its infrastructure and high-quality drinking water at a lower capital cost."
The utility is an infrequent issuer that provides drinking water to 850,000 people in Louisville and parts of five nearby counties.
The advance refunding bonds were rated Aaa by Moody's Investors Service and AAA by Standard & Poor's, with stable outlooks. Those ratings were affirmed recently on $242 million of outstanding debt.
The bonds sold Aug. 13 were issued with yields ranging from 0.10% with a 5% coupon in 2014, to 1.97% with a 4% coupon in 2022, to 3.25% with a 3.5% coupon in 2031.
Raymond James & Associates Inc. is Louisville Water's financial advisor.
Stites & Harbison PLLC is bond and disclosure counsel.
