VELCO's bond sale results best in nation, to save about $20 million

Vermont Electric Power Company’s recently completed bond sale earned the best results in the nation since the credit crisis struck two years ago and will save electricity customers millions. VELCO’s $135 million issuance of First Mortgage Bonds will refinance short term indebtedness necessary for construction of electric grid reliability projects. The 20-year fixed interest rate on the bond was set at 4.81% reflecting a credit spread of 96 basis points, the best pricing of any debt issue from any industry sector in the U.S. private placement market in more than two years and $60 billion worth of new issues. The estimated savings over the life of the bond is in the range of $20 million.
“While explaining the transaction can quickly become complicated the end result is clear: this is good news for electric ratepayers”, said VELCO President and CEO John Donleavy. “This low interest rate reflects investor confidence in VELCO’s day-to-day management and strategic direction but most importantly it will save ratepayers millions during a time when it is most needed.” The company received bids totaling $515 million from 10 investors in California, Wisconsin, Georgia, Colorado and Texas demonstrating the VELCO’s creditworthiness is recognized nationwide. VELCO’s successful bond sale comes on the heels of the company earning a two-step upgrade in its credit rating from DBRS from “A (low)” to ” A with a Stable trend.”
About Vermont Electric Power Company
Vermont Electric Power Company constructs, operates and manages the state’s transmission system. It manages over nearly 700 miles of high voltage transmission lines and maintains interconnected operations with Vermont distribution utilities and those of neighboring states as well as the Canadian province of Quebec. Customers include utilities throughout the New England region. It is privately held by 19 electric distribution utilities in Vermont and regulated by the Federal Energy Regulatory Commission (FERC) and the Vermont Public Service Board. For more information please visit www.velco.com
Source: VELCO. 12.2.2009