837151AA Muni

Santee Cooper

Credit, Energy


Publicly traded companies mentioned herein: Brookfield Asset Management Inc (BAM), Dominion Energy Inc (D), Duke Energy Corp (DUK), Toshiba Corp (6502 JP)

Highlights

The presenter is long the South Carolina State Public Service Authority Revenue Build America Bonds with a make-whole provision. There’s ~$1.5B out of $9.5B of municipal debt outstanding that has a favorable risk/reward profile given the optionality on Santee Cooper being sold. And, given the bond’s indenture, there’s protection in the event of a bankruptcy. With multiple parties in favor of a sale, including the governor and House, the odds of a deal seem higher than what the market is pricing in. The presenter explained the history of the situation as follows:

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Idea Discussion

Commentor 1 - 2 weeks ago

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