June 21, 2023

Energy Southeast successfully closes bond issuance

In a significant development for Alabama’s energy sector, Energy Southeast (ESE), a Cooperative District, priced its 1^st prepay bond issuance on June 8, 2023, and successfully closed the transaction on June 20, 2023. The bond issue of $501.24 million was achieved through the concerted efforts of various stakeholders, including the Alabama Municipal Electric Authority, Morgan Stanley, Municipal Capital Markets, Frazer Lanier, and various other advisors.

 

The proceeds from this bond issue will be used to prepay the costs of acquiring electric energy for 30 years under a Prepaid Energy Sales Agreement with Morgan Stanley. This energy will then be sold to the project participants under a Power Supply Contract. By prepaying for the energy, the participants will save $17 million over the initial period of the bond issue, which translates to an average annual saving of about $2.4 million.

 

This strategic move aligns with ESE’s mission to advance publicly owned gas and electric systems by providing low-cost, competitively priced wholesale electricity. It also underscores the commitment of ESE to invest in the future of the United States’ energy sector. ESE hopes to continue to find opportunities to provide economic benefit to participants, through the use of tax-exempt electricity prepayments in the coming months.