SAN FRANCISCO — Oregon's Port of Morrow is expected to sell $188.6 million of double A-rated revenue bonds on Thursday to finance the acquisition of electric transmission facilities.
The Port of Morrow is a port authority in Boardman, Ore., on the Columbia River. The port includes a shipping facility, a cellulosic ethanol plant under construction, and a biogas plant under construction.
The port is selling the bonds this week to finance costs of certain transmission facilities that it will own and lease to the Bonneville Power Administration.
Moody's Investors Service, which assigned the bonds a Aa1 rating and stable outlooks, said its rating reflects Bonneville's unconditional lease payment obligation directly to the bond trustee, and its long history of meeting contractual obligations.
The agency also rates Bonneville at Aa1.
"BPA's Aa1 issuer rating reflects its fundamental credit strengths comprising of U.S. government features, strong underlying hydro and transmission assets, competitive power costs, and power supply contracts with customers through 2028," Moody's analysts said in a credit report.
U.S. government support includes a $7.7 billion borrowing authority with the U.S. Treasury and the legal ability to defer its annual debt repayment to the Treasury, if necessary.
The authority's payments to the port will be made prior to Bonneville's payments on borrowings from the Treasury and federal appropriations debt, which total $4.2 billion and $4.1 billion, respectively.
Bonneville is a federal agency based in the Pacific Northwest. It was created by Congress to market electric power from the Bonneville Dam on the Columbia River and construct facilities to transmit that power.
The authority provides wholesale electricity to a population of more than 12 million in the region through a competitive resource portfolio consisting primarily of low-cost hydropower.
This week's bonds are also rated AA-minus by Standard & Poor's and AA by Fitch Ratings. Both assign stable outlooks.
Fitch analysts said credit challenges include declining cash reserves since 2008, and limited capital access as it cannot issue its own debt. However, analysts expect that access to alternative forms of financing will be sufficient to meet capital needs.
"A further trend of net secondary revenues lower than expected and declining cash reserves could pressure the ratings," Fitch said.
JPMorgan is expected to price the deal on Thursday.
The bonds will be taxable serial bonds, maturing in 2024 through 2027.
