Santee Cooper approves bond sale

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The Santee Cooper board of directors has approved the sale of $163 million in variable rate revenue obligation bonds that will be used to refund debt.

The state-owned utility projected the transition to result in debt service savings of $40 million during the next 16 years, according to a news release.

“Today’s transaction completes another financial milestone identified in Santee Cooper’s 2019 business forecast,” CFO Pamela Williams said in the release. “This debt refunding is another key step supporting our commitment to hold customer prices stable for at least the next five years.”

Williams said there has been strong investor interest in the offering.

The 2019A bond sale involves tax-exempt bonds with maturities from 2021 to 2036, the utility said. The initial interest rate is 1.19%. The bonds are secured by a letter of credit issued by Bank of America Securities, which was senior manager on the issue.

Barclays and American Veterans Group acted as co-managers.

The final official statement for the bonds will be posted at www.santeecooper.com/investorrelations and will also be available be contacting the utility’s bondholder relations at 1-877-246-3338.

Last month, Santee Cooper paid off $360 million in bond debt. The utility had been saddled with $8 billion in debt, half of it related to the failed V.C. Summer nuclear project which Santee Cooper co-owned.

In September, Santee Cooper outlined a business plan to pay off its nuclear debt by $925 million in the next two years without raising rates while increasing its solar capacity by 500%. The utility also plans to introduce large-scale battery storage, increase its natural gas production and close four coal-fired generating units in the next eight years.

The S.C. Legislature is expected to decide the fate of the utility in its 2020 session. S.C. Gov. Henry McMaster has been pushing for its sale, and several suitors, including Florida-based NextEra Energy and Charlotte-based Duke Energy, have submitted bids.

A sale would require General Assembly approval.