Empire District Bondco, LLC Annual Report - How They Did This Year

I’ve put together this guide to help you understand how Empire District Bondco, LLC performed this year. My goal is to turn complex financial filings into plain English so you can decide if this investment fits your goals.

1. What does this company do and how did they perform this year?

Empire District Bondco, LLC is a special entity created by The Empire District Electric Company, a subsidiary of Liberty/Algonquin Power & Utilities.

The company exists to manage $150 million in bonds used to pay for the retirement of the Asbury coal-fired power plant. It acts as a financial middleman: Liberty collects specific fees from Missouri electric customers and sends that money to the Bondco to pay off the bond debt. The Bondco has no employees; Liberty handles all administrative tasks. This structure keeps these specific assets separate from the parent company’s other debts.

2. Financial performance

We measure the Bondco’s success by how reliably it collects and pays out these fees. In 2025, the company collected and distributed about $12.4 million in principal and interest to bondholders. The Missouri Public Service Commission uses a "True-Up" process to adjust fees periodically, ensuring the Bondco always collects exactly what it needs to pay its debts on time. As of December 31, 2025, the Bondco met all its debt obligations and requirements.

3. Major wins and challenges

The big win in 2025 was the "True-Up" process, which successfully balanced out changes in how much electricity customers used, keeping the bond payment schedule on track. The company made two interest payments and one principal payment on time. There were no payment defaults, reinforcing the high credit quality expected from utility-backed investments.

4. Financial health

The Bondco is designed to be "bankruptcy-remote." Its only assets are the rights to collect these state-approved fees. Even if the parent company, Liberty, were to file for bankruptcy, these assets are legally protected and off-limits to the parent company’s creditors. The company is paying down its debt over 15 years, with a final maturity date in 2038. Its health depends on Missouri’s regulations, not the parent company’s day-to-day profits.

5. Key risks

The main risk is "regulatory risk." Because the money comes from state-mandated fees, any change to state law could affect the Bondco’s ability to collect funds. There is also "volumetric risk." If electricity usage drops significantly, the company must raise fees through the True-Up process. While the system is designed to handle this, a delay in adjusting those fees could temporarily affect cash flow.

6. Leadership updates

In 2025, the company made two administrative updates to match the parent company’s structure:

• Tim Wilson became President in January 2025, overseeing the agreement between the Bondco and Liberty.
• Fraser McNamee became Treasurer and Secretary in September 2025, overseeing cash flow payments to the bond trustee.

These changes are administrative and do not change the company’s mission of collecting fees to pay off the $150 million bond debt.

Final thought for your decision: This investment is essentially a bet on the stability of Missouri’s utility regulations. Because the Bondco is structured to be separate from its parent company, your primary focus should be on the regulatory environment and the consistent collection of customer fees rather than the parent company's broader business performance.