New York State Power Authority's senior debt was upgraded to AA from AA-minus by Standard & Poor's. The Nov. 3 upgrade affects $1.1 billion of debt.
In addition, S&P upgraded the authority's short term rating to A-1-plus from A-1. This affects subordinate lien series 1-3 commercial paper and series 1 extendible municipal commercial paper. The CP and EMCP balance is $554 million.
Finally, S&P raised its ratings on $106 million senior lien 1985 adjustable rate tender notes to AA/A-1 from AA-minus/A-1.
The outlook is stable on all ratings.
In explaining the upgrade, S&P analysts David Bodek and Jeffrey Panger said that after recurring transfer payments to other generation owners, over the last four years the authority has had a consistently strong fixed charge coverage of at least 2.3 times.
Further, Bodek and Panger said that the authority had a favorable debt-to-capitalization ratio of 31% in 2013.
The authority plans to have a stable debt balance of about $1.7 billion through 2017, another fact the analysts saw as positive.
The authority sells wholesale electricity to municipal utilities, government entities, large industrial and commercial customers, investor-owned utilities, and utilities in neighboring states.
The authority's long-term debt is rated AA by Fitch Ratings and Aa2 by Moody's Investors Service. Its short-term debt is rated F1-plus by Fitch and P-1 by Moody's.
