MONCKS CORNER, SC – October 34, 2008 – In a telephonic board meeting today, the Santee Cooper Board of Directors approved what one financial advisor called a “historic” sale of $667 million revenue obligation bonds, 2008 Series A and B, with maturities from 2010 to 2038.
The issue included approximately $407 million tax-exempt Series A bonds and $260 million taxable Series B bonds. The all-in true interest cost was calculated at 6.1449 percent.
“Santee Cooper is pleased with the overwhelming market reaction to our bond issue,” said Elaine Peterson, executive vice president and chief financial officer. “The transaction was oversubscribed across the spectrum of maturities on the tax-exempt series, which allowed us to lower the rate we would have to pay on the bonds, which equates to savings for our customers. We work hard to maintain a strong financial structure, and consequently we are once again able to capitalize on market conditions and ultimately benefit all of South Carolina.”
Goldman Sachs & Co. served as lead underwriter. “This was a truly historic transaction, coming as it did amidst a market in turmoil. The enormous success was due to Santee Cooper’s readiness, flexibility and dexterity,” Goldman Sachs’ Managing Director David Levy said during today’s board meeting. He noted in particular the breadth of retail and institutional investors who participated, calling it “the most I’ve ever seen in an issue of this size.”
Fitch rated the bonds at AA, Moody’s assigned an Aa2 rating, and Standard & Poor’s rated the bonds AA-. All three investment rating firms affirmed their long-term favorable ratings of Santee Cooper as well.
In its rating, Fitch said, “The ‘AA’ rating reflects Santee Cooper’s strong financial profile… strong financial metrics, solid liquidity, and timely cost recovery mechanisms. Additional credit support is provided by Santee Cooper’s sound power resource planning, reliable and low-cost power supply, and good management policies and practices.”
Moody’s backed its rating by citing “Santee Cooper’s strong management, competitive cost structure, significant capital plan and well-established record of sound finances.” Standard & Poor’s noted “the utility’s low-cost coal fired generation (which) provides customers with favorable wholesale and retail rates,” and cited the utility’s ability to “recover fuel and demand charges dynamically, which allays commodity price risks.”
The bonds will be used to help fund capital projects, including ongoing transmission upgrades and projects associated with planned construction of new coal-fired and nuclear generation.
Santee Cooper is South Carolina’s state-owned electric and water utility and the state’s largest power producer, supplying electricity to more than 163,000 retail customers in Berkeley, Georgetown and Horry counties, as well as to 29 large industrial facilities, the cities of Bamberg and Georgetown, and the Charleston Air Force Base. Santee Cooper also generates the power distributed by the state’s 20 electric cooperatives to more than 700,000 customers in all 46 counties. Approximately 2 million South Carolinians receive their power directly or indirectly from Santee Cooper. The utility also provides water to 137,000 consumers in Berkeley and Dorchester counties, and the town of Santee. For more information, visit www.SanteeCooper.com. For information on how Santee Cooper lives green and how you can go green, visit www.SanteeCooperGreen.com.