Bangkok--18 Mar--Standard & Poor's
Standard & Poor's Ratings Services has assigned its 'AA' rating to the following proposed Energy Northwest (ENW), Wash.'s revenue and refunding bonds:
--$47.99 million Project 1 electric revenue refunding bonds, series 2009A subseries 2009A1, due July 1, 2014 and 2015;
--$116.69 million Columbia Generating Station electric revenue refunding bonds, series 2009A subseries 2009A2, due July 1, 2014 through 2018;
--$119.48 million Project 3 electric revenue refunding bonds, series 2009A subseries 2009A3, due July 1, 2014 through 2018;
--$1.45 million Project 1 electric revenue refunding bonds, series 2009B1 (taxable), due July 1, 2014;
--$20.52 million Columbia Generating Station electric revenue and refunding bonds, series 2009B (taxable), due July 1, 2014, 2023, and 2024;
--$1.31 million Project 3 electric revenue refunding bonds, series 2009B-3 (taxable), due July 1, 2014; and
--$68.68 million Columbia Generating Station electric revenue bonds, series 2009C, due July 1, 2020 through 2024.
The outlook is stable. The bonds' debt service is payable as a Bonneville Power Administration, Ore. (Bonneville) operating expense.
Standard & Poor's also raised its ratings on Energy Northwest's electric revenue bonds outstanding and several additional nonfederal debt obligations that Bonneville supports to 'AA' from 'AA-'.
"The upgrade reflect our view that the strong liquidity Bonneville developed in the past five years provides a cushion against highly variable hydrology conditions and tempers the regulatory lag inherent in biennial rate cases," said Standard & Poor's credit analyst David Bodek. We also believe that the new long-term contracts between Bonneville and its customers following multiyear negotiations demonstrate the broad customer base's commitment to the Bonneville system even though electricity prices have yet to be determined.
Except for $68 million of Columbia Generating Station new money bonds for capital improvements, the several series of proposed Project 1, Project 3, and Columbia bonds are all refunding.
Bonneville's wholesale customers include 61 cooperative utilities, 17 federal agencies, 14 investor owned utilities, 48 power marketers 53 municipalities and 30 public utility districts, among others. These, and favorable project economics, create strong demand for federal Columbia River Power System (FCRPS) and ENW generation, contribute to a secure revenue stream, and credit quality.
The stable outlook reflects the cushion that the Treasury debt provides to the ENW and other nonfederal debt and a lengthy track record of timely Treasury payments. The outlook also reflects the availability of the cost recovery adjustment clause and liquidity as buffers against degraded financial performance that could occur if market conditions deteriorate for surplus power sales and procuring power to satisfy demand exceeding FCRPS and ENW output. However, significant exposure to hydrology conditions and wholesale markets constrains upside rating potential.
Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
David Bodek, New York (1) 212-438-7969
Jeffrey Panger, New York (1) 212-438-2076
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]