In the News: Recent Developments
 

$1.294 Billion Assignment: Nation’s First Nuclear Asset-Recovery Bond

(Duke Energy, NYSE: DUK)

Saber Partners, LLC served as financial advisor to the State of Florida, Florida Public Service Commission (“FPSC”). We assisted in analyzing potential Florida investor-owned electric utility (IOU) petitions that request Financing Order to issue Nuclear Asset-Recovery Bonds, pursuant to Section 7 of the special legislation (view here CS/HB 7109). Saber Partners, LLC reviewed the petition, provided expert witness testimony and assisted in the preparation and implementation of the Financing Order in addition to the structuring, marketing and pricing of the subsequent bond offering.

Saber provided the FPSC expert witness testimony (see links below) and advised the FPSC on the issuance of $1.294 Billion Duke Energy Florida Project Finance LLC five series offering of the first ever issuance of Nuclear Asset-Recovery Bonds. Saber ensured that the bonds were timely and efficiently issued.  Our work resulted in the lowest nuclear asset-recovery charges consistent with prevailing market conditions and the terms of the Financing Order which authorized the issuance.

Important Precedent

According to the industry press, “Duke Energy Florida [structured and] marketed its $1.3 billion securitization of utility fees as a corporate bond, and the strategy appears to have paid off. The deal was priced last week at interest rates in line with those of some the highest rated U.S. companies and government agencies.” For the first time ever, the bonds were included in the Bloomberg-Barclays Corporate Bond Index.  This one achievement vastly expanded the market of investors for the securities. The duration adjusted cost of funds was 2.72% on June 15, 2016. This interest rate was the lowest ever achieved for similar IOU transaction of this size and duration in the entire investor-owned utility bond market.

You can view here the FPSC Meeting Discussing Saber’s Successful Results on $1.294 Billion Financing.

View the Full Docket (#20150171) that Details the Chronology of the Transaction:

View Saber Partners’ Testimony on Behalf of FPSC Staff:

View Bond Pricing Results (achieving “lowest cost financing”) of Duke Energy Florida Project Finance, LLC, on June 15, 2016, the date of issuance:

View the Florida Public Service Commission’s Model “Request for Proposals (RFP)” and the Evaluation Chart the Commission Used  to Choose its Financial Advisor on Investor-Owned Utility Securitization:

 

$652 Million Assignment: Nation’s First Hurricane Recovery Bonds

(Florida Power & Light, NYSE: NEE)

Saber Partners, LLC provided financial advisory and expert witness services to the FPSC with respect to proposals to issue storm/hurricane-recovery bonds by the state’s investor-owned electric utilities. This was the first use of securitization to pay for hurricane damage and other costs in order to protect ratepayer interests while recognizing the needs of the utilities for certainty of recovery.

As financial advisor, Saber Partners assisted the FPSC with analyzing petitions requesting recovery of hurricane-recovery costs through securitization, preparing and implementing any financing orders, and reviewing the subsequent issuance of storm recovery bonds to ensure compliance with Section 366.8260, Florida Statutes, and the irrevocable financing order.

The hurricane-recovery bonds were issued to recoup current hurricane-recovery expenses, and/or to replenish storm recovery reserves in the event of future storm damage.

View the FPSC Financing Order dated May 30, 2006 (Docket No. 060038-EI; Order No. PSC-06-0464-FOF-EI) clarified in other respects on July 21, 2006.

See the “Issuance Advice Letter” to view the summary of the transaction submitted by FPL.

View the Full Docket (#20060038) that Details the Chronology of the Transaction:

View Saber Partners’ Direct testimony on Behalf of Staff before the FPSC: