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Public utilities

Vermont Public Utility Commission Approves Green Mountain Power Corporation's Proposal for $75 Million in First Mortgage Bonds

Strategic Insights

— 1 min read

The Vermont Public Utility Commission (PUC) has issued an order consenting to Green Mountain Power Corporation's (GMP) proposal to issue up to $75 million in first mortgage bonds to fund capital projects and maintain liquidity. The commission's decision is based on a proposal for decision and findings of fact presented by Hearing Officer Mathieu Lepage, which concluded that the proposed financing transaction is consistent with the general good of the State and that no hearing or further investigation is needed.

Key Takeaways:

  • The proposed issuance of first mortgage bonds by GMP is for an amount up to $75 million, with the proceeds to be used for planned capital projects and to provide additional liquidity.
  • GMP expects the bonds to have a 10-to-20-year term, with interest rates varying from 5.26% to 5.75% depending on the term.
  • The bonds will be sold through a private placement to accredited investors, with the closing expected to occur no later than May 31, 2024.
  • GMP will maintain a debt/equity ratio of approximately 50/50, with a total projected capitalization of $2.025 billion after the proposed issuance.
  • The commission has found that the proposed financing transaction is necessary to ensure GMP's liquidity levels are sufficient to fund its operations and maintain creditworthiness.
  • GMP's credit rating is currently stable and favorable, with a corporate (unsecured) credit rating of A Stable and a secured debt rating of A+ from S&P.
  • The Department of Public Service has determined that the proposed transaction is consistent with the Vermont Electric Plan.

Statistics:

  • $75 million: the maximum amount of first mortgage bonds to be issued by GMP
  • 10-20 years: the expected term of the bonds
  • 5.26%-5.75%: the expected range of interest rates depending on the term
  • $2.025 billion: the total projected capitalization of GMP after the proposed issuance
  • 50%/50%: the expected debt/equity ratio for GMP after the proposed issuance
  • A Stable/ A+: GMP's current credit rating from S&P
  • May 31, 2024: the expected date of the closing for the private placement

Sources:

  • Vermont Public Utility Commission, Case No. 24-0484-PET, Petition of Green Mountain Power Corporation for approval to issue first mortgage bonds in an amount up to $75,000,000
  • Hearing Officer's Proposal for Decision, dated 04/22/2024

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