Austin Approves Up to $695 Million in Austin Energy Revenue Bonds

The Austin City Council has approved the issuance of up to $695 million in Electric Utility System Revenue Refunding and Improvement Bonds. The ordinance passed on the consent agenda on Nov. 5. The bonds must be issued and sold by April 22, 2027.

The city plans to issue three series at the same time, according to the council's recommendation for action. Series 2026A would be tax-exempt fixed-rate bonds. Series 2026B would be taxable fixed-rate bonds that refinance outstanding taxable commercial paper. Series 2026C would be tax-exempt variable-rate bonds with a soft put.

Part of the proceeds will fund Austin Energy electric utility capital improvement projects. Another part will refinance commercial paper, which restores capacity in a short-term borrowing program that supports both Austin Energy and Austin Water capital programs. The city may also refund callable Series 2017 refunding bonds, but only if the savings exceed its 4.25% target.

The $695 million is a maximum borrowing authority, not a construction budget. The city has not published the split between new money and refinancing, or a list of the projects the new money will pay for. Final maturities will be set at pricing.

JP Morgan is the senior manager on the deal, with Ramirez & Co. as co-senior manager and Siebert Williams Shank and Rice Securities as co-managers. PFM is the city's municipal advisor. Norton Rose Fulbright is bond counsel and Orrick is disclosure counsel.