Staff Report
Published May 7, 2009

Santee Cooper is offering $331 million in refunding and new money bonds to pay off debt and to apply toward its capital improvement projects, the company announced today.

The issue includes $113.5 million in tax-exempt refunding Series A bonds, $166.5 million in 2009 tax-exempt Series B bonds and $50.9 million 2009 taxable Series C bonds. The tax-exempt bonds exclude S.C. residents from state and federal income taxes.

Bonds are to be sold this week. Maturities range from 2010 through 2044.

Proceeds will be spent on current capital needs, including the utility’s planned coal and nuclear power plants, and on refinancing a portion of Santee Cooper’s outstanding debt.

The lead underwriter for the transaction is Citigroup Global Markets Inc. The underwriting team also includes Goldman Sachs & Co., Merrill Lynch & Co., and Morgan Stanley & Co.

Fitch Ratings assigned an “AA” rating to the bonds, saying the rating outlook is stable. The “AA” rating reflects Santee Cooper’s reliable, low-cost power supply, serving a significant portion of the state’s population, Fitch reported.

The rating also takes into account Santee Cooper’s strong financial position, Fitch continued, attributing it in part to the company’s timely cost-recovery mechanisms in the rate structure and sufficient liquidity, strong operating performance of its diverse generating fleet and competitive cost structure.

The rating reflects Santee Cooper’s large capital improvement plan, which calls for an additional 1,091 megawatts to come online through 2018, at an estimated cost of $5.3 billion, Fitch reported.

In development are various projects that will serve to meet future growth, including the 600-MW Pee Dee coal-fired unit and the expansion of the Summer Nuclear facility. Some delays related to the permitting process are expected with the Pee Dee coal plant. The current in-service date is now anticipated to be 2014, two years later than what was expected last year.

Santee Cooper is continuing to pursue participation in the V.C. Summer nuclear plant expansion and the associated Department of Energy loan program. By December, Santee Cooper will have spent an estimated $346 million on the project, Fitch reported.