Prov Gas refinances debt, raises funds for projects

PROPANE HOLDING tanks back up Providence Gas Co.’s supply of natural gas to more than 165,000 customers.
Providence Gas Co. issued $15 million in first mortgage bonds earlier this month, which helped the company refinance some short-term debt at a lower interest rate and raise money for capital projects, according to a statement issued by the company.

Company officials estimate they will save about $1.8 million over the 30-year life of these bonds with the lower interest rate.

“We were able to lock in a better rate. Basically we refinanced our higher debt,” said Maryann Pernorio, director of investor relations and planning for the natural gas distribution company.

Last September Providence Gas refinanced about $7 million in bond at an interest rate of 10.25 percent, Pernorio explained. The new bonds were issued with a “historic low” rate of 6.5 percent, according to the company press release.

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The bonds were sold in 47 states, with about 20 percent sold in New England. The bonds were issued through Edward D. Jones of Saint Louis and have a Triple-A rating from Standard & Poor’s, according to Providence Gas.

Providence Gas is a subsidiary of Providence Energy Corp., which is a public company traded on the New York Stock Exchange. It is the largest natural gas distributor in Rhode Island, serving 25 communities and more than 165,000 customers.

Among the capital projects that could receive some funding from this latest bond issue is the expansion of Providence Gas’s distribution system into Quonset Point Davisville Industrial Park in North Kingstown and other growing communities. Providence Energy has indicated plans to invest about $60.5 million over the next two years to expand and improve its gas distribution system, which would help the company expand its operations.

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