Moody’s Investors Service has revised its outlook to negative on the A2 rating of the Missouri Joint Municipal Electric Utility Commission’s MoPEP power pool bonds ahead of its $35.6 million issue.
The A2 rating and negative outlook applies only to the security pledge of the net revenues derived from a subset of the commission’s members called the MoPEP power pool.
The pledged revenues come from MoPEP members’ “take-and-pay” power pool purchase contracts that extend beyond the debt maturity date.
“The rating is primarily based on our credit assessment of the MoPEP power pool as a full requirements joint-power agency operated by MJMEUC,” Moody’s analysts said.
They added that the outlook change stems from the MoPEP power pool’s exposure to the credit risk of the majority merchant owner of the Dogwood Generating Facility.
“The current majority owner has highly speculative-grade characteristics and MoPEP could be indirectly affected by deterioration in the majority owner’s credit profile,” analysts said.
