The Southern Minnesota Municipal Power Agency won a one-notch upgrade to A1 from Moody’s Investors Service ahead of its sale this month of $75 million of revenue bonds. The upgrade also affected $600 million of outstanding debt.
Proceeds of the sale will refund commercial paper notes and help fund the construction of the new 25-megawatt Fairmont Energy Center, a natural gas-fired power generating facility.
The A1 rating is supported by sound security provisions provided under firm take-and-pay power purchase agreements, with creditworthy participants. The utility also benefits from strong liquidity.
Standard & Poor’s affirmed the joint power agency’s A-plus rating.
“The A-plus ratings reflects our view of the credit quality of the agency’s membership base, competitive wholesale and member rates, and a record of solid debt-service coverage and strong liquidity,” said analyst Jeffrey Panger.
The JPA was formed in 1977 and provides electric and transmission services to 18 municipalities.
