Featured Bond – Week of July 8, 2019: Sacramento CA Municipal Utility District $400 Million in Electric Revenue Bonds
The Sacramento California Municipal Utility District is issuing $400 million in Electric Revenue Bonds through negotiated sale. The bonds are broken up into 2019 Series A, Series B, and Series G. The Series A and B bonds are Subordinated Electric Revenue bonds and are rated AA- by S&P and AA by Fitch. The Series G bonds are rated AA by S&P and AA by Fitch. The Proceeds from all of the bonds are to be used to finance and refinance certain additions and improvements to Sacramento’s Municipal Utility District (SMUD) Electric System including by reimbursing itself for expenditures previously made for such purposes and by paying a portion of the outstanding principal amount of SMUD’s commercial paper notes issued for such purposes, and to pay certain costs of issuance. The underwriters of the 2019 Series G bonds are BofA, JP Morgan, Goldman Sachs, and Morgan Stanley.
More About The Bonds & SMUD
The Series G bonds are fixed rate current interest bonds amortizing August 15, 2029 through 2041. A portion of the 2019 Series G bonds are designated as Green bonds for LEED certified renovations and upgrades to the SMUD Headquarters Building. The independent second party opinion was provided by Kestrel Verifiers. This Green bond portion is $75 million and is SMUD’s first green bond issuance. The building is designed to achieve LEED Gold certification. The Series A and B bonds are term rate mode bonds with sinking fund payments on August 15, 2042 through 2049. The 2019 bonds are tax-exempt.
Last Fall, SMUD adopted an integrated resource plan for carbon reduction goals leading to net zero emission by 2040, five years ahead of the State requirement. This requires a commitment to local renewable energy and significant investments in electrification of the local building and transportation sectors. SMUD works to ensure it can meet California’s mandatory renewable portfolio standards and clean energy goals. SMUD’s customer base is 1.5 million people spanning over 900 square miles in Central California. Residential customers provide 48.2% of revenue. The top 10 customers of SMUD only make up about 10% of their revenues.
Security for the Bonds
The 2019 Series G bonds are limited obligations of SMUD payable from Net Revenues – Revenues after payment of Maintenance and operation Costs and Energy Payments. The Subordinated 2019 Series A and B bonds are limit obligations of SMUD as well, payable from Net Subordinated Revenues – Net Revenues after payment of Senior Bonds.
These details and more on purposes, security, risks and other matters pertaining to these Sacramento Municipal Utility District Electric Revenue Bonds can the found in the official statement, provided by MuniOS. After registering, if needed, visitors can link directly to the official statement as well as an investor’s roadshow by searching for the Sacramento Municipal Utility District.
Statistical Snapshot: Sacramento Municipal Utility District Selected Financial and Economic Indicators
Provided above is a quick snapshot of financial characteristics of the Sacramento Municipal Utility District along with the medians for other electric utility providers, courtesy of Merritt Research Services, LLC. Merritt has many of the sector medians publicly available and regularly updated on their Benchmark Central page. (Merritt believes the data to be reliable but does not make any representations as to its accuracy or completeness).
These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.
Potential investors should rely only on the official documents and figures provided in the official statement (prospectus). Although the numbers presented in this summary are primarily derived from public documents, including issuer audits, issuer reports and other public sources such as federal reporting agencies , they are not intended to replace official information presented in connection with the bond sale. Medians may differ from official sales documents due to methodology or survey base variances.