GRDA had $320 million in offerings, and received $1.8 billion in orders
GRDA’s efforts to strengthen the balance sheet over the past 3 years have paid off with an astounding response to their bond sale.
CEO Dan Sullivan, after the sale of the bonds, had this comment, “GRDA had $320 million in offerings, and received $1.8 billion in orders. It was very well subscribed, with great retail requests and we are very pleased,” said GRDA CEO Dan Sullivan. The rates received for these bonds is at 3.65%, with the taxable rate at 3.49%. “This is a great deal for us, and we are very happy with how that came together. We are appreciative of CFO Carolyn Dougherty and her staff, along with our team of financial advisors, the JP Morgan team that led negotiations and Oklahoma State Bond Advisor Jim Joseph for all the work he has done. He has been very involved in the entire process.”
GRDA CHAIRMAN Tom Kimball had the following comments:
The following story is about GRDA’s forward looking efforts to sell bonds in order to finance a new conversion of a coal fired plant to natural gas. The above story celebrates the great rates!
GRDA receives credit rating upgrades, new outlooks
Vinita – When the Grand River Dam Authority goes forward with its bond issue, totaling approximately $320 million next month, it will do so with improved credit ratings.
Last week, both Moody’s Investors Services and Standard & Poor’s Ratings Services issued upgrades and new outlooks on GRDA’s ratings. For GRDA, it is action that comes at a very important time, just before the issuance of new debt. Another rating agency, Fitch, also improved its outlook on GRDA bonds last week.
“This is great news for GRDA,” said Chief Executive Officer Dan Sullivan. “I think it reflects the hard work and important decisions on the part of our board, management and workforce but more importantly, it will benefit all our ratepayers.”
Higher credit ratings can equal lower interest rates, Sullivan added, and they will also enable GRDA to save money on natural gas hedging in the future.
“That is very important as we moved towards construction of the new GRDA Unit 3,” said Sullivan. Construction of that facility – a combined cycle natural gas generation plant – will be funded with proceeds from the October bond issue.
On Tuesday (September 16) Moody’s announced it was raising GRDA’s from A2 to A1, with a stable outlook. The agency based its findings on several key factors including GRDA’s improved financial outlook and low rates. According to Moody’s, GRDA’s electric rates consistently rank among the lowest in Oklahoma while also ranking in the lowest 20 percent nationwide.
On Wednesday (September 17), Standard & Poor’s raised its rating of GRDA to an “A+” from an “A.” In a news release issued by the agency, S&P Credit Analyst Judith Waite said the GRDA “upgrade mainly reflects our view of stronger debt service coverage due primarily to lower debt service.”
Earlier this year, S&P had revised GRDA’s outlook, based on the previous “A” rating, from stable to positive. However, this latest action is the first rating upgrade GRDA has received from the agency since it moved GRDA to the “A” in 2008. Both the S&P and Moody’s upgrades are historic and represent the highest credit ratings GRDA has ever received.
Following those upgrades, Fitch announced on Friday (September 19) that it was affirming the “A” rating it had given to GRDA in 2008. The agency is also moving GRDA’s outlook from “stable” to “positive”.
“All these agency announcements followed their very thorough reviews of GRDA operations and financial position,” said Sullivan. “We are very pleased with their assessments and look forward to the bond issue and the upcoming projects it will fund.”
While GRDA will use the majority of the proceeds from this bond issue to construct the new gas plant, other proceeds will be used to complete emissions control upgrades on Unit 2. That unit is one of two existing coal fired generators at the Grand River Energy Center (east of Chouteau).
Headquartered in Vinita, GRDA is Oklahoma’s state-owned electric utility; fully funded by revenues from electric and water sales instead of taxes. Directly or indirectly, GRDA’s low-cost, reliable electricity touches75 of 77 counties in the state. At no cost to taxpayers, GRDA also manages 70,000 surface acres of lakes in the state, including Grand Lake, Lake Hudson and the W.R. Holway Reservoir. Today, GRDA’s 500 employees continue to produce the same “power for progress” that has benefited the state for 75 years.
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