Google parent Alphabet Inc. is back in the municipal bond market for the second time this year with a $1.5 billion prepaid energy deal.
Alphabet was identified as the funding recipient on a bond offering that will be issued by the California Community Choice Financing Authority, according to preliminary bond documents posted Tuesday. Goldman Sachs Group Inc., one of the leading underwriters of prepaid deals, is arranging the offering.
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Prepaid energy deals are a fast-growing sector within the tax-exempt debt market for local and state governments. The complicated deals allow utilities to secure a discounted supply of electricity or gas, and involve a financial middleman, known as a funding recipient, which receives proceeds of the bond sale upfront in exchange for making periodic payments over time to facilitate the delivery of energy to the participating utility.
Representatives for Google and Goldman declined to comment.
The utility that will receive the discounted supply of electricity is Central Coast Community Energy, a joint powers authority that serves customers along the California coastline spanning from Santa Cruz to Santa Barbara. It will use the energy it receives through the upcoming bond sale to sell to retail customers, according to bond documents.
