FORT COLLINS, Colo.- As Platte River Power Authority prepared to issue $40,095,000 in new electric revenue bonds two major financial rating agencies upgraded the utility's credit rating. Fitch, Inc., upgraded Platte River Power Authority's credit rating on its senior lien debt from 'AA-' to 'AA'. And, in a similar move, Moody’s Investors Service assigned Platte River a 'Aa3' rating and upgraded its outlook from stable to positive. The upgrades will reduce Platte River's future financing costs.
The proceeds of the bond issuance will be used to pay down higher interest debt, resulting in savings with a net present value of $3,000,000.
"The actions of these rating agencies are a strong acknowledgement of Platte River's financial strength at a time when many other utilities are being downgraded." said Bob Abiecunas, Platte River's chief financial officer.
Brian Moeck, Platte River's general manager is pleased by the new credit ratings. "We are constantly managing our risks and costs. This will ultimately benefit our owners - the citizens of the communities we serve", he said.
According to Fitch, Platte River's upgrade to 'AA' reflects "…several years of strengthening financial performance despite high volatility in the electricity market, its low-cost coal and hydro-based generating resources, competitive wholesale rates, and robust sales growth reflecting vibrancy of the authority's four member cities." Fitch also notes that from a power supply perspective, Platte River's average cost of power is one of the lowest in the Rocky Mountain region.
Moody's 'Aa3' is the highest rating the company has assigned to a joint-power agency. According to Moody's, "The rating and positive outlook reflect the following key credit factors: competitive wholesale rates; low debt levels; a strong cash position; a conservative, forward-looking management team; a trend of strong debt service coverage; and an economically vibrant service area which has resulted in consistently greater-than-expected load growth."