Fitch Rates Mountaineer Gas $90MM Notes 'BB'; Outlook Stable.NEW YORK -- Fitch rates the $90 million of notes issued by Mountaineer Gas Company (MGC MGC Mammalian Gene Collection MGC Media Gateway Controller MGC Middle Georgia College MGC Museums and Galleries Commission (UK government) MGC Mississippi Gaming Commission MGC Manual Gain Control ) 'BB'. The notes were issued in two series: --7.58% $70 million note due 2017; --$20 million floating-rate series priced at LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). + 2.625%. The notes are unsecured and rank equally with existing and future unsecured debt of MGC. The proceeds of the notes were used to refinance $87 million of long-term debt. MGC also amended its bank credit facility to reduce the amount to $125 million from $135 million and adjust the covenants. The refinancing eliminated relatively large principal payments of $18 million that were formerly scheduled for 2008. Completion of the refinancing improved MGC's short-term liquidity position by extending its long-term debt maturities and conforming covenants to current cash flow expectations. MGC's ratings are supported by regulated local gas distribution operations with a leading market share in West Virginia, and an adequate purchased gas adjustment mechanism (PGA (1) (Professional Graphics Adapter) An early IBM PC display standard for 3D processing with 640x480x256 resolution. It was not widely used. (2) (Programmable Gate Array) See gate array and FPGA. ) and satisfactory liquidity following the close of the refinancing. Additionally, MGC benefits from a gas procurement plan approved by the West Virginia Public Service Commission (WVPSC) and access to adequate supply and storage. MGC's relationship with the WVPSC is considered balanced, despite a historically challenging regulatory environment overall for regulated utilities in West Virginia. Rating concerns include the risks associated with rising operating costs during a period of frozen base rates that extends through to April 2010, above-average rates of demand destruction as a result of warmer than normal weather and conservation, and an economically disadvantaged service territory. Lower demand has led to lower than forecasted cash flows and credit metrics that are weak relative to 'BB' guidelines. MGC's EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become to interest was 2.14 times for the 12 months ending Sept. 30, 2007. MGC is a local gas distribution company that serves 223,500 customers in West Virginia. MGC was purchased by a private partnership between an affiliate of ArcLight Energy Partners Fund II and IGS IGS - Internet Go Server. Utilities LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (IGS) in 2005. 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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