Cleco Subsidiary Issues $180 Million of Securitized Bonds
March 06 2008 - 4:30PM
Marketwired
PINEVILLE, LA .
The issuer will use the net proceeds from the issuance of the
bonds to pay Cleco Power the purchase price of Cleco Power's rights
under the financing order described below. Cleco Power will use
approximately $50 million of such funds to establish a storm
reserve fund for future storm damage, with the remaining portion of
the proceeds (approximately $125 million), which is reimbursement
for unrecovered storm costs from hurricanes Katrina and Rita, being
used for working capital and other general corporate purposes.
Debt service for the bonds will be paid by a special monthly
storm recovery surcharge paid by all of Cleco Power's retail
customers. The bonds were issued in two tranches and have an
effective weighted average life of seven years and a weighted
average interest rate of 4.86 percent. A $113 million, five-year
weighted average life tranche was issued with an interest rate of
4.41 percent, and a $67.6 million, 10.5-year weighted average life
tranche was issued with an interest rate of 5.61 percent.
The Louisiana Public Service Commission (LPSC) issued a
financing order in September 2007 authorizing Cleco Power to
securitize its unrecovered storm restoration costs. Prior to this,
the LPSC authorized Cleco Power to recover restoration costs
through an interim storm recovery plan. The securitization
structure is expected to decrease the current interim storm
surcharge by $2.26 per average monthly residential bill.
"This has been a joint endeavor between Cleco and the LPSC,"
said Cleco President and CEO, Michael Madison. "The LPSC passed the
orders needed for the rating agencies to favorably rate the bonds.
With their help, we issued AAA-rated bonds, the highest rating
possible. This high rating will save our customers money."
Louisiana utilities have never before issued securitized bonds
to finance storm restoration costs. Cleco Power started the process
in 2006, which required state legislative action and regulatory
approval.
"We've been working on this process for over two years," said
Madison. "We made a commitment to implement the best storm-recovery
plan for our customers, and we kept our promise. Our securitization
team's persistence resulted in monthly customer savings from this
special financing. They navigated through many unknowns and
developed a storm-recovery financing structure good for our
customers and our company."
Pathfinder Capital Advisors LLC acted as financial advisor to
the LPSC, and Credit Suisse Securities (USA) LLC acted as
structuring agent and sole book runner on the transaction.
This news release does not constitute an offer to sell, or the
solicitation of an offer to buy, any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such offering would be unlawful.
Cleco Corp. is a regional energy services company headquartered
in Pineville, La. It operates a regulated electric utility company
that serves 273,000 customers across Louisiana. Cleco also operates
a wholesale energy business that has approximately 1,350 megawatts
of generating capacity. For more information about Cleco, visit
www.cleco.com.
Investor Contacts: Cleco Corporation: Ryan Gunter (318) 484-7724
Rodney J. Hamilton (318) 484-7593 Analyst Inquiries: Dresner
Companies Kristine Walczak (312) 726-3600 Media Contact: Cleco
Corporation Robbyn Cooper (318) 484-7136
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