The New York State Energy Research and Development Authority sold $24.3 million of revenue bonds in its first issuance to finance loans for consumers for residential energy efficiency improvements.
The authority issued Series 2013A residential energy efficiency financing revenue bonds as part of its Green Jobs-Green New York program, it announced Tuesday. The program is a statewide initiative to promote energy efficiency and the installation of clean technologies.
"The innovative approach used to secure these bonds addresses financial market barriers that impede the flow of private capital to support clean-energy projects and provides a potential national model for other states interested in providing low-cost financing for energy efficiency projects," said authority president Francis Murray.
Standard & Poor's and Moody's Investors Service rated the bonds triple-A, based on a guarantee from the New York State Environmental Facilities Corp. through its state revolving fund program.
The EFC's quality "is a reflection of our view of the combination of extremely strong enterprise risk and financial risk profile scores," said Standard & Poor's credit analyst James Breeding.
Payments received from borrowers within the program provide security for the bonds.
The EFC manages the largest state revolving fund program in the nation with nearly $13 billion in assets. It determined these bonds qualified for financial assistance because of the reductions in fossil fuel combustion and related reductions in air pollutants.
The qualified energy conservation bonds were sold with an average term of about 6.8 years and an average interest rate of roughly 3.21%. Since these bonds provide a federal interest subsidy from the U.S. Treasury, their net interest cost is anticipated at about 0.48%.
Citi, Jefferies & Co. and Ramirez & Co. were the underwriters.
Bond proceeds will replenish the $42.5 million green jobs revolving loan fund established under a 2009 law.