The Florida Public Service Commission announced last week it selected New York-based advisor Saber Partners to be advisor for a program of hurricane recovery stranded cost ABS issuance to help Florida utility companies fund repairs to power lines and facilities after last year's brutal hurricane season.
While financing orders have not been finalized, Saber CEO Joseph Fichera, said the first transaction is likely to be from Raleigh, N.C.-based Progress Energy, which has 15 distribution plants in Northern and Central Florida. That deal is currently expected to hit the market sometime in 1Q06. Other issuers, such as Juno Beach, Fla.-based Florida Power & Light Co., and Tampa-based Tampa Electric are likely to bring deals to market as well, as those issuers have significant costs associated with rebuilding power systems.
Fichera stressed, however, it is very early in the process and no final decisions have been made. Saber has been chosen to "assist in structuring the financing orders and in the process in general," added Fichera.
Other advisors in the running were C.H. Guernsey & Co., the Public Resources Advisory Group, Vantage Consulting, Inc. and Via Finance. According to a release from the Florida P.S. Commission, Saber was a unanimous pick to advise on the deals.
The bonds will be structured similarly to other rate-reduction bonds, meaning they are backed by fees collected from electricity consumers. Bonds of this type have been used mostly to recover costs associated with power industry deregulation, but are now being used to fund environmental improvements to power facilities
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