NEW YORK - Moody's Investors Service said it has downgraded to A3 from A2 the rating on Glasgow Electric Plant Board, Ky.'s revenue bonds, affecting $25.3 million in outstanding revenue debt.
Concurrently, Moody's has assigned a A3 rating to the $2.6 million electric system revenue bonds, Series 2012. Proceeds from the sale will be used to for various capital improvements of the electric utility system.
The bonds are secured by a senior lien on the net revenues of the utility system.
The A3 rating reflects the utility system's continued narrow liquidity position which narrowed further in fiscal 2011, satisfactory debt service coverage, mature yet concentrated customer base, and adequate legal provisions.
The rating also considers the relationship between the system and the Tennessee Valley Authority (TVA) as the system's sole power supplier. This relationship includes key credit strengths of reliable power supply and TVA-defined restrictions on transfers to the city's general fund.