LIPA Refinances Some Long-Term Debt Excellent Bond Rates Will Produce Savings of $49.3 Million Melville, NY - March 22, 2006 - Speaking before a breakfast meeting of Action Long Island today at the Hilton Long Island, Long Island Power Authority (LIPA) Chairman Richard M. Kessel announced that a just completed bond offering will save the Authority $49.3 million in debt service on a net present value basis because of the extremely favorable rates that LIPA's bonds received from the market. These revenues will be used to hold down LIPA's costs and help stabilize electric bills In a separate matter, Mr. Kessel also announced that LIPA received $4.1 million as a result of a proceeding started by the U.S. Department of Energy in 1986 to collect price control violations by the petroleum industry when it overcharged for petroleum products between 1973 and 1981. LIPA will use the funds to lower its long-term debt, especially the debt left over from Shoreham. "We're extremely pleased with the confidence the bond market has placed in LIPA's long-term bonds," said Mr. Kessel. "It demonstrates that LIPA is financially sound, and by lowering our debt service by $49.3 million and our debt base by an additional $4.1 which will provide customer savings over the long term." LIPA closed on the $950 million offering of General Revenue Bonds yesterday. The bonds were issued in two series. The Series 2006A Bonds total $853 million, which advanced refunded bonds issued by LIPA in 1998. The Series 2006B Bonds total $97 million, which will reimburse LIPA's treasury for capital improvements on the Transmission and Distribution System. When priced during the week of March 6, the financial market responded favorably to LIPA's bond offering by setting an average yield of 4.52% for Series 2006A with an average life of 16.6 years, and 4.8% for Series 2006B with an average life of 29.2 years. The bonds issued by LIPA in For the bond offering, Bear Sterns & Company served as Financial Advisor; Hawkins, Delafield &Wood LLP served as Bond Counsel; and Clifford Chance US LLP served as Disclosure Counsel. Goldman, Sachs & Co. served a lead underwriter; UBS Investment Bank and Lehman Brothers were co-senior managers and they lead a group of 17 financial institutions that placed LIPA's bonds with investors. LIPA, a non-profit municipal electric system, owns the retail electric Transmission and Distribution System (T&D) on Long Island and provides electric service to over 1.1 million customers in Nassau and Suffolk counties and the Rockaway Peninsula in Queens. In terms of customers served, LIPA is the 3rd largest municipal electric utility in the nation and the 6th largest in terms of electricity delivered. LIPA does not provide natural gas service or own any on-island electric generating assets. ### Contact Information: Press Release 3/22/06 12:56 PM Eastern |
| |||||||||||||||||||||||||||||||||
|
