The Piedmont Municipal Power Agency will sell $346 million of debt next month.
Fitch Ratings assigned a BBB-plus rating to the electric system revenue bonds that will be sold in two series, 2008A and 2008B. The outlook is stable. The agency had upgraded Piedmont to BBB-plus from BBB in January.
Proceeds will be used to finance repairs, replacements, and other modifications to the Catawba nuclear station, and to refund certain outstanding bonds.
Credit strengths include sufficient liquidity that is bolstered by a sizeable rate stabilization fund, according to analysts. Service area characteristics remain below average but continue to improve, aided by solid customer growth and a broadening out of local industries.
Piedmont’s weaknesses include plant concentration, with its primary power supply coming from two large nuclear power stations.
The municipal systems serve a population of over 150,000, with energy growth increasing at about 2.2% per year. Fitch noted that wholesale electric rates are above those charged by Duke Energy, the primary electric supplier in the region.
Moody’s Investors Service assigned a Baa1 rating to the $145 million of Series 2008A bonds.
