LIPA Completes 2006 Plan of Finance
Refinancing $2.2 Billion of Long Term Debt
Aggregate Refinancings Will Produce Savings of $115 Million
Uniondale, NY – December 14, 2006 – Long Island Power Authority (LIPA)
Chairman Richard M. Kessel announced today that a just completed bond offering,
together with three prior refinancings this year, will save the Authority $115
million in debt service on a net present value basis because of the extremely
favorable rates that LIPA’s bonds received from the market. These savings will
be used to hold down LIPA’s costs and help stabilize electric bills at their new
lower rate through next year.
“Favorable bond market conditions, together with LIPA’s improved credit
quality have allowed LIPA to capture these savings for our customers” said Mr.
Kessel. “We’re extremely pleased with the confidence the bond market has placed
in LIPA’s long-term bonds. It demonstrates that LIPA is financially sound, and
lowering our debt service by $115 million will provide customer savings over
both the short and long term.”
LIPA expects to close on the final leg of its 2006 Plan of Finance, a $518
million offering of General Revenue Bonds, on December 20, 2006. The Series
2006F Bonds will advance refund bonds issued by LIPA in 1998, 2001 and 2003. The
Series 2006F Bonds will produce net present value debt service savings of $28.5
million. When priced on December 7, 2006 the financial market responded
favorably to LIPA’s bond offering by setting an average yield of 4.19% with an
average life of 12.3 years.
In three separate transactions earlier this year LIPA issued its Series
2006A, 2006D, and 2006E Bonds in an aggregate principle amount of $1.7 billion
to advance refund bonds issued by LIPA in 1998, 2001 and 2003. These advance
refundings produced aggregate debt service savings of $86.6 million on a net
present value basis.
For the bond offerings, Bear Stearns & Company served as Financial Advisor;
Hawkins, Delafield and Wood LLP served as Bond Counsel; and Clifford Chance US
LLP served as Disclosure Counsel.
LIPA’s senior manager group of Citigroup, Goldman, Sachs & Co., Lehman
Brothers, Morgan Stanley and UBS Investment Bank lead a group of 12 financial
institutions that placed LIPA’s bonds with investors. |
