Moody’s Investors Service downgraded a portion of Northern Municipal Power Agency, Minn.’s electric system revenue debt one notch to A3.
The rating action impacts $238.5 million of outstanding debt from issues in 2007, 2008, 2009, and 2010. At the lower level, the agency assigned a stable outlook. The downgrade reflects an overall decline in the credit quality of NMPA’s participant pool of members.
It also takes into account the Baa2 issuer rating of Minnkota Power Cooperative, which provides a financial backstop for NMPA’s obligations. Minnkota was downgraded in November 2011 to Baa2 from Baa1, after a large rate increase to cover retrofits to its owned generation decreased the cooperative’s competitiveness in the region.
The agency is based in Minnesota and serves 12 municipal utilities in northwestern Minnesota and eastern North Dakota.
