Utah Wind Power Gets $92M Bond Boost

DALLAS — Utah Associated Municipal Power Systems has issued nearly $92 million of revenue bonds for its Horse Butte Wind Project that began operations last month in Idaho.

The Horse Butte project is one of 47 wind-energy producing sites recently built or in development in the state. Eastern Idaho is considered one of the windiest places in the country.

UAMPS, created by Utah legislation in 1980, is a political subdivision of the state that plans, finances and develops electric projects for member cities and districts in Utah and neighboring states.

The debt for the Horse Butte project includes $67.9 million of Series A revenue bonds reaching final maturity in 2032 with 5% coupons earning a yield of 3.49%. The $23.97 million Series B variable-rate demand revenue bonds reach maturity in 2032. For the first week, the variable rate bonds drew a rate of 1.08%, said Scott Fox, finance manager for UAMPS.

“We were very pleased with the rates on both sets of bonds,” Fox said.

The variable-rate bonds are backed by a direct-pay irrevocable letter of credit from the Bank of Montreal through its Chicago branch. The bonds initially bear interest at a weekly rate, but may be converted to a daily, commercial paper, long-term or fixed-rate mode.

The bonds were priced Sept. 6 through negotiation with Citi, Wells Fargo Securities and BMO Capital Markets. Seattle-Northwest Securities Corp. was financial advisor on the offering.

The Series A bonds are rated A-minus by Standard & Poor’s and Fitch Ratings. The variable-rate Series B bonds carry ratings of A-plus from S&P and AA-minus from Fitch based on the letter of credit.  Outlooks are stable. Moody’s Investors Service has not rated the bonds.

Located about 15 miles east of Idaho Falls, the Horse Butte Project was declared operational Aug. 15, two years after construction began.

The project developed during a period of rapid growth in the wind generation business.

American wind power reached 50 gigawatts of electricity this year, enough to power nearly 13 million homes, according to the American Wind Energy Association. The power coming from wind turbines is also equivalent to the production from 44 coal-fired plants or 11 nuclear plants, the association said.

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