The Virgin Islands Water and Power Authority will be offering $60 million of electric revenue bonds this month.
The bonds will be issued as Series 2012A, B and C bonds. One series is tax-exempt and the other two are taxable.
Maturities range from two to 10 years. The bonds are fixed rate. Officials said they expect yields to be in the high 3% to the mid-4% range.
Standard and Poor's rates the upcoming VIWAPA bonds BBB-minus with a stable outlook. Moody's Investors Service rates the subordinate-lien bonds Baa3 and stable, and the senior-lien bonds Baa2 and stable.
On Thursday, Fitch Ratings downgraded Series A to BB and Series B and C to BB-minus. It also dropped the outstanding senior-lien bonds to BB and the subordinate-lien bonds to BB-minus. Fitch maintains a negative watch on the the upcoming and outstanding bonds.
Proceeds from the new bonds will refund outstanding senior bonds and restructure existing loans that are subordinate to the rated bonds, S&P said.
Standard & Poor's cited the authority's high dependence on oil along with its high leverage, low cash position, a limited economy based on tourism and below-average income levels.
On the other hand, analysts noted the VIWAPA's improved interaction with the Virgin Islands Public Service Commission.
Rice Financial Products is the lead underwriter. The bonds are not expected to be insured.