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MLGW News Release
MLGW's elite credit rating boosts long-term savings for ratepayers
March 3, 2010
(March 3, 2010) - As further proof of its strong financial position, Memphis Light, Gas and Water Division recently completed an advance refunding of $470 million in electric system revenue bonds that will net ratepayers an average of $2.3 million a year in interest savings through 2018.

MLGW capitalized on attractive interest rates and the elite credit ratings of its outstanding electric system revenue system bonds, which are 'AA+' rated by Fitch Ratings. Among U.S. public power systems, only TVA has a higher credit rating. Morgan Keegan & Co., based in Memphis, participated as the lead underwriter on the refunding.

Pricing of the bonds was completed on Wednesday, Feb. 17, culminating at least five months of work. An advance refunding is a bond issuance in which new bonds with lower yields are sold to replace callable bonds with higher yields. The proceeds of the new bonds are then invested until the call date of the old bonds and are paid off with the invested proceeds.

In all, MLGW expects to save $18.8 million of interest expense over the remaining life of the bonds.

MLGW Vice President and Chief Financial Officer John McCullough said MLGW's strong credit rating made the savings possible. About one-fifth of the savings could be attributed to the ratings upgrades that MLGW's electric system revenue bonds received last month, he said.

"We probably have the highest rating of any issuer in the state of Tennessee right now, including the state," said MLGW Commissioner Steve Wishnia, noting that investors are searching for quality investments, like MLGW, to add to their portfolios. "That says a lot about MLGW."

MLGW is the largest three-service public power utility in the nation, serving more than 429,000 customers in Memphis and Shelby County. A January 2010 survey showed that MLGW has the fifth lowest electric rates in the nation.