The Long Island Power Company is marketing its much anticipated utility bond that will offer a total of $2.1 billion of notes backed by payment from retail electric customers in LIPA’s service area.
The deal, Utility Debt Securitization Authority Restructuring Bonds Series 2013, is being issued by LIPA’s New York's Utility Debt Securitization Authority.
It will consist of $481.72 million of taxable bonds and $1.6 billion of tax-exempt bonds, according to a Fitch Ratings presale report.
Goldman Sachs and Morgan Stanley are lead underwriters on the deal.
Fitch has assigned the notes a preliminary AAA’ ratings based on the credit enhancement provided by the structure’s true-up mechanism.
To protect bondholders from fluctuations in collection, the deals are structured with a true-up mechanism that adjusts tariff charges to existing and future retail electric customers to ensure timely payment of the bonds.