Fitch Ratings has joined Standard & Poor's in revising the Long Island Power Authority's outlook to stable from negative ahead.
Fitch analysts Lina Santoro and Dennis Pidherny said recent New York Public Service Commission approval of a three-year rate hike played a large role in the utility's improved outlook for LIPA's A-minus rating.
The action comes ahead of the utility's plans to sell $117 million of series 2015B and $149 million in series 2015C electric system general revenue bonds Nov. 16.
S&P also revised its LIPA outlook to stable on Monday.
"The Outlook revision to stable from negative reflects constructive treatment by the Department of Public Service, a staff arm of the New York Public Service Commission, in its initial three-year rate review of LIPA," Santoro and Pidherny wrote in a Nov. 13 report. "While the rate proceeding this year resulted in a 26% reduction in LIPA's final revenue request, the DPS's recommendations provide for sound long-term financial goals and policies, sufficient to stabilize LIPA's rating at the A-minus level."
Proceeds of the 2015B series bonds will be used primarily to fund capital improvements. The 2015C series is being utilized to refinance outstanding variable rate demand bonds. These deals were assigned ratings of A-minus by S&P and Baa1 by Moody's Investors Service.
