DALLAS — Arizona's Salt River Project earned savings of more than $90 million, or 14%, on a $924 million issue that combined $300 million of project finance with refunding, officials said.
With additional refunding opportunities, the issue proved nearly $100 million larger than the $833 million listed on the preliminary official statement.
"The timing was such that we were going to market when there was volatility with Treasuries," said Steve Hulet, SRP corporate treasurer. "We weren't sure how that was going to affect the response to our transaction. However, Goldman Sachs did a great job of assessing the market and setting a price scale that proved to be a good balance for both the market and SRP."
Pricing took place over May 12 and May 13. The SRP deal was the largest in the market for the week of May 11.
With interest from several sectors, 42 buyers participated in the bidding, Hulet said.
"There was some oversubscription and we were able to get sufficient bids for all of the maturities we offered," he said. "The net present value of the savings was at the upper end of our expectations."
Goldman Sachs managing director Jill Toporek was lead banker as her firm took a 50% stake on the deal. Toporek has managed the Goldman's Energy Group for nearly 15 years.
Co-managers, each with a 12.5% interest, were Bank of America Merrill Lynch, Citi, JPMorgan and Morgan Stanley.
Michael Mace, managing director at Public Financial Management Inc., served as financial advisor.
With final maturity in 2045, the tax-exempt serial bonds, carry ratings of Aa1 from Moody's Investors Service and AA from Standard & Poor's with stable outlooks.
SRP is Moody's second-highest rated public power provider behind the Tennessee Valley Authority, analysts said.
Maturities of 2045 bearing 5% coupons earned yields of 4.29%, according to Municipal Market Data. Refunding bonds maturing in 2036 with 3% coupons callable in 2024 earned yields of 3.385%.
