Fitch Rates JEA's (Florida) $150MM St. Johns River Power Park Bonds 'AA-'; Outlook 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 Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has assigned an 'AA-' underlying rating to JEA's $150 million St. Johns River Johns River may refer to any of the following rivers in the United States:
JEA Jacksonville Electric Authority JEA Journal of Egyptian Archaeology JEA Jamaica Exporters Association JEA Jackson Energy Authority (Jackson, Tennessee) : --$2.5 billion electric system revenue bonds 'AA-'; --$1.1 billion power park bonds 'AA-'. The Rating Outlook is Stable for all ratings. Fitch views the 'AA-' bond ratings to be reflective of JEA's ability to make timely payments on its full debt burden, including the power park obligations, which are paid as an operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. of JEA's electric system. The power park bonds will finance a portion of JEA's planned power park capital additions anticipated over the next five years ($299 million), of which approximately 62% will fund environmental upgrades to meet current national ambient air quality standards The National Ambient Air Quality Standards (NAAQS) are standards established by the United States Environmental Protection Agency that apply for outdoor air throughout the country. . The bonds are expected to price March 15, 2007 with Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. as lead underwriter Lead underwriter The head of a syndicate of financial firms that are sponsoring an initial public offering of securities or a secondary offering of securities. Could also apply to bond issues. and in part may be insured by an 'AAA' rated bond insurer. The bonds will be issued under a new bond resolution (the Second Resolution) and will be on parity with JEA's outstanding First Resolution power park revenue bonds. The Second Resolution includes revisions to the debt service reserve requirement and debt service coverage requirement. While Fitch believes that these changes make the resolution less restrictive, they are not expected to materially affect the power park's credit ratings. In addition, the second resolution gives JEA the ability to issue variable rate power park debt. Support for JEA's power park and electric system ratings is provided by the electric system's highly competitive retail electric rates, the power park's (and JEA's full generating portfolio's) low operating costs and high reliability, and the power park's accelerated debt amortization schedule (73% of the power park bonds mature by 2014). While the electric system's financial performance has been under some pressure recently, Fitch believes that JEA's board and senior executives have taken appropriate steps to increase the overall predictability of cash flows and improve the system's liquidity position through the implementation of a new 'pricing philosophy' in 2005. Specifically, through JEA's use of timelier rate adjustments, Fitch expects that JEA's financial metrics will remain within Fitch's financial parameters for the 'AA-' rating category. In fiscal 2006, JEA posted improved electric system debt service coverage (including the power park obligations as an operating expense) of 2.44 times (x) compared to 1.93x in 2005. JEA also bolstered its cash on hand from 14 days to 40 days as of Sept. 30, 2006. After including JEA's $100 million line of credit, JEA's electric system liquidity was a reasonable 85 days of operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. (compared to 53 days in 2005) at year-end. The power park is a two-unit 1,276 net MW coal- and pet coke-fired steam electric generating station located in the northeast section of the City of Jacksonville, FL. JEA owns an 80% interest in the power park and is the plant operator. Florida Power and Light (FPL; IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. rated 'A' by Fitch) owns the remaining 20%. JEA's and FPL's power park obligations are several and not joint. Therefore, JEA's ability to collect sufficient revenues (including debt service on the outstanding power park bonds) is dependent on FPL's ability to make payments to JEA. JEA is a vertically integrated utility and an independent agency of the City of Jacksonville, Fla. The electric utility is one of the largest public power systems in the U.S., serving approximately 402,000 electric customers in a service area that covers virtually the entire city and parts of neighboring counties. In addition to the electric utility, JEA also owns and operates a water and sewer enterprise (rated 'AA' by Fitch), as well as a district energy system, which are separately secured from JEA's electric functions. 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. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion