Bangkok--21 Apr--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AA-' rating to Snohomish County Public Utility District No. 1, Wash.'s electric system and generation system revenue bonds series 2010. At the same time, Standard & Poor's affirmed its 'AA-' underlying rating (SPUR) on the district's parity debt.
"The district's credit strengths include a cash position that remains strong, the stability and wealth of the underlying economy, a moderate debt burden that has aided in the establishment of strong operating margins, and resource planning that should allow the district to comply with environmental regulations and accommodate load growth while preserving financial strengths," said Standard & Poor's credit analyst Ian Carroll.
The notes are secured by a subordinate lien on net electric system revenue, and proceeds will refinance the notes issued in 2008. In October 2008, a similar note issuance was used to acquire the series 1995 generation system bonds. The district expects to take out the notes with a long-term debt issuance in 2010. The district has $263 million of senior electric system revenue bonds and $6.7 million of subordinate debt.
The stable outlook reflects our expectation that financial margins will remain adequate when factoring in debt and other fixed costs. We expect margins to come down from historic highs (2005-2007) to more modest levels due to rising power costs associated with renewable energy contracts. Moreover, the district forecasts planned capital spending to reduce cash reserves.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Electric Utility Ratings, June 15, 2007
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and 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. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Ian Carroll, San Francisco (1) 415-371-5060
Peter V Murphy, New York (1) 212-438-2065