PGW refinancing expected to save $13.1 million in present value

Philadelphia Gas Works’ completed bond refinancing is expected to produce $13.1 million in net-present-value savings, the City of Philadelphia reported Oct. 16, 2026. The City said the estimate equals 5.82% of the refunded principal. The bond sale totaled $212.845 million, an amount the City rounded to $213 million in its announcement.

The $13.1 million is the City’s present-value calculation, not cash already returned to customers. The City did not report a specific customer-bill reduction tied to the transaction. The refinancing was intended to reduce PGW’s borrowing costs.

Two bond series made up the refinancing i

The City attributed about $7.6 million in savings to a current refunding of the 14th Series bonds and about $5.5 million to a tender of 15th Series bonds. In a tender, bondholders are invited to sell their bonds back to the issuer. The City initially offered approximately $218 million for tender, received offers for more than $115 million, and accepted nearly $87 million that met its savings criteria. The City reported 53% participation.

The two components account for the City’s combined savings estimate. The reported savings percentages were 5.53% for the 14th Series and 6.28% for the 15th Series. These figures describe the City’s financing calculation; they do not establish a specific change in monthly utility bills.

Sale terms and timing i

The City reported orders from 33 investors totaling more than 3.3 times the amount of bonds sold. It said repricing after those orders lowered rates by as much as seven basis points per maturity and added more than $500,000 in savings compared with initial estimates. A basis point is one-hundredth of a percentage point. The final combined all-in true interest cost, a measure of borrowing cost, was approximately 3.76%.

The City also said spreads averaged about nine basis points better than PGW’s 2024 issuance relative to the Municipal Market Data benchmark. That comparison is about bond spreads against the benchmark, not customer utility rates.

The bonds were priced in August 2026. The tender information lists an Aug. 18 pricing notice and a Sept. 3 settlement date, and the City said the transaction closed Sept. 3. Oct. 16 was the date the City announced its final savings figures.