Arizona's Salt River District to Sell $700 Million in Bonds for Electric System Projects

By Zaeem Shoaib

Arizona's Salt River Project Agricultural Improvement and Power District plans to sell $700 million of securities to finance improvements to its electric system under a capital improvement plan.

The district will issue 2024 Series A and 2024 Series B Salt River Project Electric System Revenue Bonds, according to documents posted Wednesday on MuniOS. The issuance amount for each series of bonds hasn't been determined.

Pricing is expected to take place on Sept. 25, with closing on Oct. 9. The bonds have maturities ranging from 2026 to 2054.

Payments on the debt are from and secured by a pledge of and lien on the district's revenue.

Interest on the Series A bonds will be payable on Jan. 1 and July 1, while the Series B bonds will be payable semiannually on May 1 and Nov. 1.

The district operates the Salt River Project and owns and operates an electric system that generates, purchases, transmits and distributes electric power and energy.

It provides service to residential, commercial, industrial, and agricultural power users in parts of Maricopa, Gila, and Pinal counties. The district has about 1.1 million customers, and supplies power to about half of the Phoenix Metropolitan Statistical Area, according to the roadshow document posted on MuniOS.

The district's sales are projected to grow 6.8% annually from fiscal year 2025 through 2030.

The capital improvement plan for the electric system for fiscal years 2025 through 2030 totals about $11.5 billion, with about $10.9 billion allocated for construction. That includes $5.5 billion for generation including plant upgrades and future generation facilities, $2.6 billion for electrical distribution systems, including future growth and replacement of old cables. Another $763 million for will be spent on transmission, including line additions and station upgrades.

For the year ended April 30, the district had total operating revenue of $4.15 billion, with a net revenue of $405.6 million.

The bonds are rated AA+ by S&P Global Ratings and Aa1 by Moody's Investors Service.

BofA Securities is lead manager on the issuance.

Write to Zaeem Shoaib at zaeem.shoaib@wsj.com

(END) Dow Jones Newswires

September 19, 2024 13:07 ET (17:07 GMT)

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