Avista Issues $120M in Mortgage Bonds to Repay Borrowings

Avista Corporation has issued $120 million in mortgage bonds with a 6.18% interest rate due in 2055. The proceeds will be used to repay borrowings for utility facility construction. The bonds are secured by a lien on Avista's property. Analysts rate Avista stock as a Hold with a $38.00 price target. The company's valuation offers stability with a reasonable P/E ratio and high dividend yield.

Avista Corporation (AVA) has recently issued $120 million in mortgage bonds with a 6.18% interest rate, due in 2055. The proceeds from these bonds will be used to repay borrowings for utility facility construction. The bonds are secured by a lien on Avista's property, providing a measure of financial stability for the company. This issuance comes amidst a backdrop of analysts rating Avista stock as a Hold, with an average price target of $38.00.

The company's valuation offers stability, with a reasonable P/E ratio and a high dividend yield. Analysts have noted the balance between Avista's strong financial performance and solid earnings call, which is tempered by bearish technical signals [1]. The company's valuation metrics reflect a cautious yet supportive outlook.

Avista's financials indicate a robust balance sheet and operational discipline. The company has maintained a high occupancy rate of 98.5% and long-term leases with annual rent escalations, which helps smooth out cash flow volatility. The company's debt-to-EBITDA ratio of 5.64X is in line with historical averages, reflecting prudent leverage management. This financial flexibility allows Avista to invest aggressively in its assets, as seen in its Q1 2025 investment of $1.37 billion at a 7.5% cash yield [2].

While the mortgage bond issuance indicates a commitment to long-term financial stability, investors should closely monitor Avista's ability to manage debt service costs, given the rising interest expenses. The company's strategy to maintain a high dividend yield and consistent growth in adjusted funds from operations (AFFO) will be critical to sustaining investor confidence.

References:

[1] TipRanks. (2025). AVA Analyst Ratings. Retrieved from https://www.tipranks.com/stocks/ava/forecast

[2] AInvest. (2025). Realty Income 2025: Defensive Buy Yield in a Low-Yield World. Retrieved from https://www.ainvest.com/news/realty-income-2025-defensive-buy-yield-world-2507/