The Long Island Power Authority's credit outlook received a Standard & Poor's boost to stable from negative Monday ahead of an electric system general revenue bond deal.
S&P analyst Jeff Panger attributed the improved outlook to LIPA receiving approval from the New York Department of Public Service for a three-year rate hike plan from 2016 to 2018. The ratings agency also affirmed LIPA's A-minus rating on $4 billion of senior-lien unsecuritized electric revenue bonds.
LIPA is slated to issue electric system general revenue bonds, series 2015B and 2015C totaling around $250 million on Nov. 16. Proceeds of the $100 million in 2015B series will be used primarily to fund system improvements with $150 million of 2015C being utilized to refinance outstanding variable rate demand bonds. Moody's assigned a Baa1 rating to these deals.
LIPA sold $1 billion in restructuring bonds through its Utility Debt Securitization Authority on Oct. 15 priced by Bank of America Merrill Lynch with the deal rated triple-A by Moody's, S&P and Fitch Ratings. The utility, whose operations were taken over by PSEG Long Island in 2014, is expected to have around $7.9 billion in total debt outstanding by the end of 2015, according to LIPA CFO Tom Falcone.
