LIPA Debt Ratings Maintained

The Long Island Power Authority retained its Standard & Poor's and Moody's Investors Service debt ratings just before the utility is slated to issue roughly $800 million in new revenue bonds.

S&P maintained LIPA's rating at A minus with a negative outlook while Moody's assigned a Baa1 to the utility with a stable outlook for $795 million of electric system revenue bonds scheduled to be issued in mid-December. The Nov. 24 S&P report noted that LIPA has the benefits of a "stable revenue stream" but also faces major debt challenges. Moody's emphasized LIPA's "potential for improved operating efficiency" under PSEG-LI, which began operating the utility on Jan. 1, but also mentioned its "weak liquidity" as the rationale for its outlook.

LIPA was removed from S&P's credit watch list in March after a securitization of $2 billion of debt reduced its balance-sheet debt by around 28%. In May 2013, Moody's downgraded LIPA's senior revenue bonds to Baa1 from A3 because of concerns about costs associated with damages caused by Hurricane Sandy. The agency has $5.2 billion of senior revenue bonds outstanding, according to Moody's and S&P. 

LIPA didn't immediately respond to a request for comment on the new ratings.