SAN FRANCISCO — Wells Fargo submitted the winning bid in Seattle's competitive offering of $265 million of electric power revenue bonds Oct. 22.
The firm won with a true interest cost of 3.096%.
Seattle City Light, sold the bonds to finance capital improvements to its light and power plant system, as well as to finance its conservation programs.
The city also plans to use a portion of the proceeds toward refunding $125 million of its outstanding light and power improvement revenue bonds issued in 2004.
The municipally owned electric utility provides service to approximately 408,000 customers in Seattle and surrounding areas within King County, Wash., covering a population of 776,000.
The bonds, which will mature in 2015 through 2044, are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's.
"Seattle City Light's Aa2 rating considers SCL's strong historical willingness to raise rates when necessary, wealthy and diverse service area covering the city of Seattle and surrounding communities, and credit supportive financial policies including the rate stabilization account," Moody's said.
Challenges to the credit rating include material wholesale price exposure and hydrology risk, the ratings agency said.
Standard & Poor's also noted the city's large capital improvement program that management expects will add about $1.25 billion of debt in the next six years.
Seattle City Light's debt totaled about $1.78 billion as of Sept. 1.
The bonds are special limited obligations of the city, secured by Seattle's municipal light revenue parity bond fund.
Foster Pepper PLLC was bond counsel on the deal and Piper Jaffray & Co. was financial advisor.
