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SCE&G to offer bond issue on Friday

Staff Report //August 16, 2018//

SCE&G to offer bond issue on Friday

Staff Report //August 16, 2018//

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S.C. Electric & Gas has sold a total of $700 million principal amount of its first mortgage bonds, the utility announced Thursday.

The sale included $300 million principal amount of a 3.50 percent series due Aug. 15, 2021 and offered to the public at 99.997% and $400 million principal amount of a 4.25 percent series due Aug. 15, 2028 and offered to the public at 99.750%.

First mortgages are the primary loans that pay for a property and can be packaged into bonds to sell for a short-term profit.

Merrill Lynch, Pierce, Fenner & Smith Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC acted as joint book-running managers, or main underwriters. FTN Financial Securities Corp. and Synovus Securities Inc. served as co-managers for the transaction, which is subject to normal closing conditions.  

SCE&G, the principal subsidiary of Cayce-based SCANA Corp., said in a news release that it will apply the net proceeds from the bond sales to pay $550 million of first mortgage bonds with a maturity date of Nov. 1, 2018. The utility said it may also use the net proceeds to repay borrowings under a credit agreement, as well as other short-term debt, and for general corporate purposes.

The bonds are expected to be issued on Friday, SCE&G said.

SCE&G’s 727,000-plus customers in South Carolina are seeing their bills drop this month because of temporary rate cuts passed by the General Assembly and ordered by the S.C. Public Service Commission. The 15% rate reduction, mandated in response to rate increases related to the failed V.C. Summer nuclear reactor project in Fairfield County, is reflected on bills issued on and after Aug. 7. August bills also include a one-time credit for V.C. Summer-related charges from April until July.

The cut will be effective through December, or until the PSC renders a final decision on who must pay for the reactors, abandoned last July after rising costs and mounting delays, and how those fees will be recouped.

Earlier this month, SCANA reported a $113 million drop in earnings in the second quarter of 2018 compared to the same period in 2017 and attributed the drop to the rate cuts.

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