Fitch Rates AECI's $71.55MM PCRBs 'AA'; Revises Outlook on Outstanding Bonds to Stable.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch assigns an 'AA' rating to Associated Electric Cooperative's (AECI) $71.55 million pollution control revenue refunding bonds refunding bond A bond that is issued for the purpose of retiring an outstanding bond. Issuers refund bond issues to reduce financing costs, eliminate covenants, and alter maturities. See also crossover refunding bonds, prerefunding. (PCRBs) series 2008. Fitch also affirms the 'AA' rating on all outstanding PCRBs. The Rating Outlook is revised to Stable from Negative. The bonds are being issued to refund the entire principal amount of AECI's outstanding auction rate securities (PCRBs series 2007). The bonds are being issued initially with an interest rate that will be set for a specified time period (term-rate) to be determined on the day of sale. The maturity of the bonds is 2034. The bonds are expected to price the week of March 10, 2008. The Stable Outlook reflects management's notable progress toward developing a power supply strategy with greater cost certainty, increased clarity of the plan's impact on financial operations, and an expected increase in cash flexibility. The rating also takes into consideration that rates should remain competitive, compared to neighboring neigh·bor n. 1. One who lives near or next to another. 2. A person, place, or thing adjacent to or located near another. 3. A fellow human. 4. Used as a form of familiar address. v. utility systems even as AECI implements a $1.3 billion capital plan and increases its exposure to gas volatility. Supporting the 'AA' rating are AECI's experienced management team, historically stable financial performance, strong liquidity, and long-term all requirements member contracts. AECI's favorable position Noun 1. favorable position - the quality of being at a competitive advantage favourable position, superiority advantage, vantage - the quality of having a superior or more favorable position; "the experience gave him the advantage over me" includes its low-cost, predominately coal-based generating portfolio, favorable transmission access, and competitive wholesale rates. Looking forward, key rating drivers include: --Maintenance of financial metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. in line with the 'AA' rating category. --Adequate liquidity to fund both the capital plan and provide funding support at such time when the bond term expires. At the end of the term rate period, AECI will have a mandatory tender of the bonds for purchase of 100% of the principle and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. prior to any mode conversion (e.g. LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). index or a daily, weekly, term, fixed, or auction rate). In the event that a remarketing fails, AECI can rely on its ample liquidity to buy the bonds, which currently includes approximately $87 million in cash on hand, $148 million in deferred revenues deposited to a fund, and $175 million in available lines of credit. AECI is a not-for-profit electric generation and transmission (G&T) cooperative in Springfield, MO with assets of $2 billion and 5,388 mw of owned and contracted generation. AECI serves more than 850,000 customers by providing wholesale electric power through six member G&T cooperatives to 51 distribution cooperatives located in Missouri, Iowa and Oklahoma. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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