Grant PUD refinances some of its debt
Grant PUD announced it has refinanced $77 million in outstanding debt, a move that Grant PUD says will reduce finance costs, help hold a planned 2018 rate-revenue increase to 2 percent, and more equitably align debt burden to the life of the assets it finances – a big fairness boost to customers.
“This transaction increases customer value by spreading the debt burden over the multiple generations who will benefit from the equipment upgrades it financed,” said Bonnie Overfield, senior manager of finance with Grant PUD in a press release.
The transaction refinances bonds of varying maturity dates through 2023 into a single new issue of 30-year bonds. The sale became final Dec. 20.
The deal does not add to Grant PUD’s $1.3 billion in debt, Overfield said. It locks in an interest rate that will reduce long-term debt liability by approximately $12 million, and it saves $1 million to $1.5 million in consulting, underwriting and staff time by refinancing the older bond issues as a single, “advanced-refunding” transaction, Grant PUD said.
The debt restructuring comes just ahead of proposed federal tax reforms that, if approved as they were proposed, would prohibit advanced refunding, potentially increasing refinancing costs by millions. Fast action by Grant PUD’s financial team and executive managers identified the costly risk of waiting to restructure the debt.
“A significant amount of credit is due also to PUD commissioners for having the insight and faith in staff to authorize and execute this financing,” Overfield said in a press release. “It’s a win-win for both the PUD and our customers.”
By Post-Register Staff