1 Nikolai J. Sklaroff,
Capital Finance Director
November 14, 2023
Results of Recent Financing for
Power Enterprise
Agenda
2 • Informational Update on
2023 Power Enterprise
Revenue Bonds
• Detailed description in
Bond Sale Results
Announcement emailed
on October 12, 2023
• Further information from
our investor website
reachable through:
Debt
Management and
Disclosure Reports
(sfpuc.org)
Power Revenue Bond Sales
(Series 2023A)
3 2023 Series A
Authorized
Par and
Purpose
Up to $145 million to finance or
refinance Power Enterprise projects
through the refunding and retirement of
commercial paper issued as interim
financing for such projects
Pricing September 27, 2023
Approval: September 20, 2023 Commission
Meeting
Underwriters • JP Morgan Securities LLC as
Senior Manager
• Morgan Stanley as Co- Senior
Manager
• Siebert Williams Shank & Co., LLC
as Co-Manager
Ratings S&P Global Ratings affirmed AA
power revenue bond rating and
Stable outlook. Fitch Ratings affirmed
AA- power revenue bond rating and
Stable outlook
2023A Bond Sale Conditions
(AAA Rated Bonds Over Past 30 Years)
4 • The broader financial markets were volatile due to the Federal Reserve indicating interest rates may stay higher for longer after recent economic data and
• Fears of a potential government shutdown from the standoff in Congress, which may have negative ramifications for federal government credit ratings Source: PFM, Municipal Market Data Index data.
2023A Bond Sale Results
5 • SFPUC’s strong credit ratings and reputation in the capital market, as well as a low California supply week and relatively high yields generated strong demand that lowered rates:
o Bonds were offered that matured annually from 2026 to 2043. o Lowered interest rates in maturities from 2026 to 2039 by 0.03% to 0.09%
o Lowered interest rates in maturities in 2043, 2048, and 2053 by
0.02%
o Total subscription at the end of the Order Period was about 3.3x the available bonds, with $401 million of total orders for $121.66 million of bonds available during the Order Period.
2023A Final Pricing Results
6 2023 Series A Power
Revenue Bonds
Par Amount $123,905,000
Premium $7,324,363.80
Total Proceeds $131,229,363.80
True Interest Cost 4.56%
Sale Date September 27, 2023
Final Maturity November 1, 2053
Purpose $117.7M to fund Power Enterprise capital projects (refund commercial paper)
Independent Pricing Consultant
(2023 Series A Report)
7 As per policy on SFPUC negotiated bond
sales, in addition to our Municipal Advisors,
we engaged an Independent Pricing
Consultant (Backstrom McCarley Berry & Co.,
LLC) to evaluate the results of the sale.
o “In addition to absolute pricing levels, it
is also important to look at the pricing
versus other comparable transactions.
MMD spreads for the SFPUC issuance
were fair and reasonable, in addition to
being some of the tightest versus other
CA issues in the market the same day.”
o “You can rely on this letter as BMCB’s
certification that in our professional and
independent capacity as pricing advisor
on the Power Revenue Bonds, 2023
Series A, SFPUC received fair and
favorable pricing.”
Outstanding Power Debt
($million)
8 Before
2023A
After
2023A
Revenue Bonds $159 $283
Commercial Paper
• Authorized
• Drawn
250
117
250
0 • Net result: Secured $117.7 of proceeds to allow to
the release of additional capital appropriation
9 • 30-year fixed rate; first principal November 1, 2026 • “Wrapped” debt service structure for level aggregate debt • Interest capitalized to November 1, 2025
Aggregate Senior Lien Debt Service (FY)
Source: PFM Financial Advisors LLC
Debt Service Schedule
(Series 2023A Power Revenue Bonds)
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20Millions
Outstanding Senior Lien Net Debt Service Series 2023A Bonds Net Debt Service Last Expected Issuance of 2023
10 SFPUC Bond Issuance by Calendar Year*
*This chart represents only bonds issued. In addition, there are various other financing tools the SFPUC utilizes including loans and credit facilities that we obtain and maintain. $0
$500
$1,000
$1,500
$2,000
$2,500
2001 2002 2003 2006 2009 2010 2011 2012 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023 $ millions
Water (Green) Water (Non-Green) Wastewater (Green) Wastewater (Non-Green) Power (Green) Power (Non-Green) 11 Questions