Moody's and Fitch affirm Aa3 and AA-ratings for WMMPA bonds
Two major financial ratings agencies have affirmed their ratings and stable outlook for the Western Minnesota Municipal Power Agency (WMMPA) in advance of a planned WMMPA issuance of approximately $320 million of revenue bonds.
Moody’s Investors Service assigned a rating of Aa3 to the planned 2014 bond issue and affirmed its Aa3 rating on about $230 million of previously issued bonds.
Fitch Ratings assigned an 'AA-' rating to the planned 2014 issue and also affirmed its AA- rating on current outstanding bonds.
WMMPA plans to price the bonds June 26. A copy of the preliminary official statement is available on the MRES website. Proceeds will be used primarily to fund a significant portion of the construction of the Red Rock Hydroelectric Project (RRHP) and to complete the WMMPA share of certain CapX 2020 transmission projects. In addition, a portion of the funds will be used for capital improvements at the existing coal-fired Laramie River Station power plant and for costs relating to the bond issuance. The 2014 bond issue is expected to provide funds for more than 80 percent of the 2014 through 2018 capital additions for WMMPA.
WMMPA is the provider of financing for all power supply and transmission facilities utilized by Missouri River Energy Services (MRES). MRES and WMMPA have a power supply agreement that entitles MRES to the output of all WMMPA-owned facilities. MRES provides administrative services to WMMPA and provides wholesale electricity and energy services to 61 members in the states of Iowa, Minnesota, North Dakota, and South Dakota.
Moody’s and Fitch cited the low-cost competitive power costs of MRES, the sound financial policies of MRES and WMMPA, and the increasing diversity of power supply resources in assigning their ratings.
“We are pleased that Fitch and Moody’s continue to recognize the financial strength of WMMPA, MRES and the members, especially since the planned 2014 bond issue will more than double our debt outstanding.” said MRES Director of Finance and CFO Merlin Sawyer. “WMMPA is one of just a handful of public power joint-action agencies in the nation to earn ratings in the AA category from both agencies.”