BRADENTON, Fla. - The North Carolina Eastern Municipal Power Agency plans to complete the sale of its assets this month, followed by the defeasance of the agency's debt.

The state Local Government Commission approved NCEMPA's issuance of up to $550 million of new taxable bonds on Wednesday.

Bond proceeds together with $1.2 billion from the asset sale to Duke Progress Energy will be used to defease the agency's outstanding debt, according to chief financial officer Timothy Tunis.

The total cost of the defeasance is about $1.95 billion based on current market conditions, he said. The costs, and the total amount of new bonds to be issued, could change between now and the sale date.

The bonds are expected to price the week of June 22, but the exact date depends on the asset sale receiving one final approval this month from the Nuclear Regulatory Commission to transfer operating licenses of the assets from the agency to Duke, Tunis said.

"We've targeted closing on the asset sale and the bond issue for June 30," he said. "It's all contingent on the approval of the transfer of the operating license."

The deal, in the works almost two years, is aimed at reducing power costs for the NCEMPA's 32 member cities and towns, which own municipal electric systems serving 462,000 people in eastern North Carolina.

After the deal is consummated, Duke will provide electricity to the members, which will see average savings of about 18% in wholesale power costs, Tunis said.

The bonds have been rated A by Fitch Ratings and preliminarily rated A-minus by Standard & Poor's. Both have stable outlooks. S&P said its rating would be confirmed once the bonds are sold.

While NCEMPA has obtained ratings from Moody's Investors Service in the past, Tunis said the agency will not seek a rating for the upcoming bond sale. "We thought two [ratings] were sufficient," he said.

The structure of the upcoming deal has not been determined, though the bonds will have a 10-year amortization schedule.

Bank of America Merrill Lynch will be the book-runner. Other underwriters on the deal are Morgan Stanley, Barclays Capital, Wells Fargo, Raymond James & Associates, and First Southwest Co.

Hawkins Delafield & Wood LLP is bond counsel. Womble Carlyle Sandridge & Rice LLP is underwriters' counsel.

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