March 17 (Bloomberg) -- A $160 million bond sale beginning tomorrow will finance a natural gas-fired power plant for Holland, Michigan.
The city’s largest bond issue is rated AA by Standard & Poor’s and Aa3 by Moody’s Investors Service. The tax-exempt, 25-year revenue bonds will be repaid with income from the electric utility that serves Holland and four surrounding townships on the eastern shore of Lake Michigan. The plant will replace three coal-fired facilities and is to begin operating Nov. 1, 2016, according to a Standard & Poor’s analysis.
The debt will cover 72 percent of the cost of the new plant, with the rest paid in cash, according to the city.
Bonds will be sold to individual investors tomorrow and the remainder to institutions March 19. The closing will be April 22.
Securities from Michigan and its municipalities have returned 3.6 percent this year, compared with 3.5 percent for the broad $3.7 trillion muni market, according to S&P Dow Jones Indices.
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