California Water Service Group Secures $370 Million in Financing
California Water Service Group Announces Major Financing
California Water Service Group (NYSE: CWT) has successfully completed the sale of a significant amount of financing, totaling $370 million. This includes $170 million in Senior Unsecured Notes and $200 million in First Mortgage Bonds. These transactions are crucial for the group's ongoing financial strategy and corporate plans.
Details of the Financing
The Senior Unsecured Notes comprise two series: Series A with an amount of $70 million at a 4.87% interest rate due in October 2032, and Series B amounting to $100 million at a 5.22% interest rate due in October 2035. The First Mortgage Bonds, all $200 million, are set at a 5.64% interest rate and will mature in October 2055. Both instruments received favorable ratings from S&P Global, with the Notes rated A and the Bonds rated AA-.
Financial Structure and Use of Proceeds
Interest on both the Notes and the Bonds will accrue on a semi-annual basis and will be payable in arrears. The issued Notes will stand equally among other debts under a credit agreement with Bank of America, N.A. Meanwhile, the Bonds will hold security in the form of liens on the properties of California Water Service Company, which is a wholly owned subsidiary of the group.
Funding Objectives
The net proceeds from the sale of the Notes are earmarked for refinancing existing debts and supporting general corporate activities. Similarly, California Water Service Company intends to utilize the proceeds from the Bonds for refinancing and corporate purposes in accordance with state regulations.
Regulatory Compliance
It is important to note that both the Notes and the Bonds have not been registered under the Securities Act of 1933. Consequently, they cannot be offered or sales in the United States without proper registration or an exemption. Investors should be aware that this announcement is not an offer to sell or a solicitation to purchase securities.
Company Background
California Water Service Group operates several regulated utilities, including California Water Service, Hawaii Water Service, and New Mexico Water Service. Collectively, these entities deliver both regulated and unregulated water service to over 2.1 million residents across various states. CWT's stock is actively traded on the New York Stock Exchange, reflecting its robust market presence.
Investors’ Considerations
Given the uncertainties and risks that inherently come with financing in any sector, investors are encouraged to carefully consider any forward-looking statements contained within financial releases. Factors like regulatory actions, environmental compliance, and economic conditions could significantly impact the company's operations and financial outcomes.
Frequently Asked Questions
What are the main financial actions taken by California Water Service Group?
California Water Service Group has raised $370 million through the sale of Senior Unsecured Notes and First Mortgage Bonds to refinance debt and support corporate objectives.
What are the interest rates for the new financial instruments?
The Senior Unsecured Notes consist of Series A with a 4.87% interest rate and Series B with a 5.22%. The First Mortgage Bonds carry a 5.64% interest rate.
How will the proceeds from these sales be used?
The proceeds will be used primarily to refinance existing debts and for general corporate purposes.
What is the duration and rating of the financial instruments?
The Notes are due between 2032 and 2035, and the Bonds mature in 2055, with ratings of A and AA-, respectively.
Where can I learn more about California Water Service Group?
Additional information about California Water Service Group can be found on their official website.
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