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District Energy Corporation sells $20 million in bonds for new jail, existing projects

----5/13/2010----

LINCOLN - The District Energy Corporation (DEC) sold $20,365,000 in revenue bonds Tuesday (5/11) to fund heating, cooling and backup generation facilities for Lancaster County's new Adult Detention Facility and other existing projects.

 

The true interest cost of the bonds is 3.48 percent.

 

In April, Moody's Investors Service and Standard & Poor's Ratings Services assigned 'Aa1' and 'AA' ratings to the bonds, respectively, said DEC President Steve Masters.

 

"These are high ratings for the bonds, which resulted in a lower cost to taxpayers at the bond sale," Masters said. "The strength of the participants in DEC projects (city, county and state) helped to strengthen the bonds."

 

About $14 million will be used to finance the DEC's S.W. 40th Thermal Energy Facilities that will provide thermal energy and emergency backup power services for the new Lancaster County Adult Detention Facility. In addition, DEC received an American Recovery and Reinvestment Act matching grant of $5 million that will be used toward the construction and installation of a large-scale geothermal energy system for the Thermal Energy Facilities project.

 

Other proceeds will be used to refinance the existing debt on DEC projects, which include the State Office Building, state capitol, Governor's residence and the County-City Building complex.

 

Moody's said its high rating reflects the strength of Lincoln Electric System (LES) "and its solid long-term financial trends including a consistent financial record, conservative budgeting and prudent resource planning." LES provides management and operational services to DEC.

 

Among the points cited as reasons for Standard & Poor's high 'AA' rating was DEC's sound financial position, the strength of the service contracts and adequate historic debt coverage are reasons for the rating.

 

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