Public Finance

The Power of Long-Term Relationships


In Memphis, Tennessee, Stephens acted as financial advisor to the country’s largest three-system utility. 

City of Memphis, Tennessee (Memphis Light, Gas & Water)
$71,000,000 Electric System Revenue Bonds, Series 2014
$15,000,000 Water System Revenue Bonds, Series 2014

The Memphis Light, Gas and Water Division (MLGW) is the largest three-system utility in the United States.  Since 2001, Stephens has successfully served as financial advisor on over $2 billion in bond financings for MLGW, a testament to the importance of long-term relationships built on expertise, trust and transparency.

Recently, the City of Memphis issued $71,000,000 Electric System Revenue Bonds, Series 2014 and $15,000,000 Water System Revenue Bonds, Series 2014.  The bonds were structured with 20-year amortization schedules.  The true interest cost for the Electric System Revenue Bonds was 3.18%.  The true interest cost for the Water System Revenue Bonds was 3.05%

As of the date of issuance, the City of Memphis did not have any Water System bonds outstanding.  Stephens worked closely with the MLGW to obtain new ratings for the Water System.  The result: Standard & Poor’s assigned its highest rating level of “AAA” to the Water System Revenue Bonds;  Moody’s Investors Service assigned its second highest rating of “Aa1.”  The proceeds from the Water System Revenue Bonds will be used to expand and improve the water system.  

As of the date of issuance, the City of Memphis had over $562 million in Electric Revenue Bonds outstanding.  Stephens was able to work with MLGW to structure the Series 2014 Electric Revenue Bonds with a security lien that was senior to the outstanding debt.  This structure resulted in bond ratings of Aa2/AA+ by Moody’s and Standard & Poor’s, respectively.

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