Bangkok--29 Apr--Standard & Poor's
Standard & Poor's Ratings Services has assigned its 'AA' long-term rating to Chelan County Public Utility District No. 1 (Chelan or the district), Wash.'s consolidated system revenue bonds, series 2011 A and B. At the same time, Standard & Poor's affirmed its 'AA' rating on Chelan's consolidated system revenue obligations, both senior and subordinate lien. The outlook is stable.
"The ratings reflect our view of Chelan's very low operating costs from strong hydroelectric generating assets and very strong cash position, which we believe offsets variability in wholesale market revenues," said Standard & Poor's credit analyst Peter Murphy.
The district's net revenue pledge secures the 2011 bonds, which will refinance about $200 million senior bonds outstanding.
The consolidated system is the ultimate obligor for the district's utility systems and hydroelectric projects issuing debt through the consolidated system's bond resolution. The resolution that created the operating lien effectively closed what had been the senior lien. In addition, under the subordinate operating lien resolution, bond protections have improved slightly. Consequently, Standard & Poor's does not distinguish between the two liens.
Established in 1936, Chelan owns and operates an electric distribution system, a telecommunications system, three major hydroelectric power generating projects (Rocky Reach, Rock Island, and Lake Chelan), and a small water and wastewater system. The district issues debt primarily through its consolidated systems bond resolution, a financing vehicle created in 1987, for issuing tax-exempt debt on behalf of both the retail utilities and the hydroelectric projects from which it gets most of its power.
The stable outlook reflects our assessment of Chelan's strong financial policies regarding DSC and liquidity, as well as the district's low cost power supply. The outlook also reflects our expectation that management will continue to counter revenue shortfalls to achieve its targeted liquidity levels.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Electric Utility Ratings, June 15, 2007
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Media Contact:
Edward Sweeney, New York (1) 212-438-6634,
[email protected]
Analyst Contacts:
Peter V Murphy, New York (1) 212-438-2065
Judith Waite, New York (1) 212-438-7677