Fitch Ratings downgraded to A from A-plus Redding, Calif.’s $30.7 million of electric system certificates of participation, Series 2005A, and $152.6 million of electric system COPs, Series 2008A.
The outlook is stable.
The downgrade reflects Redding Electric Utility’s weakened financial performance, which includes recent debt service coverage below 1.0 times and forecasted coverage between 1.0 times and 1.3 times through 2013. Accompanying the reduced coverage is deterioration in historical and forecast liquidity, which is not expected to increase before fiscal year 2014.
The financial metrics have been largely driven by costlier replacement power, decreasing consumption, weak wholesale sales, a higher share of fixed costs, and modest rate increases.