Moody's Investors Service said it has downgraded to Baa1 from A2 the rating on Overton Power District No. 5, Nev.'s $15.6 million of outstanding special obligation electric system net revenue debt and assigned a negative outlook.
The downgrade reflects the district's failure to meet its rate covenant related to debt service coverage on its Series 2008 special obligation revenue bonds.
The rating is also reflective of the district's large but mostly undeveloped service territory in southeastern Nevada, relatively weak local economy, and reliable source of power. The outlook suggests the potential for further rating action absent significant and sustained improvement in debt service coverage.