Fitch Rates Northern States Power Company (MN) 1st Mortgage Bonds.CHICAGO -- Fitch Ratings has assigned an 'A+' rating to the new $400 million issue of 6.25% first mortgage bonds due June 1, 2036, of Northern States Power Company Northern States Power Company (formerly NYSE: NSP) was a publicly-traded S&P 500 electric and natural gas utility holding company based in Minneapolis, Minnesota that is now a subsidiary of Xcel Energy (NYSE: XEL). - Minnesota (NSPM NSPM Network Services Project Management NSPM Novartis Singapore Pharmaceutical Manufacturing Pte Ltd ). The proceeds will be used for general corporate purposes and to repay $200 million of 2.875% first mortgage bonds due Aug. 1, 2006; $2.4 million of the Ramsey County, MN and the County of Washington, MN 4.10% resource recovery refunding revenue bonds; and $2.4 million of the County of Anoka, MN 5.0% resource recovery refunding revenue bonds. The current ratings and Rating Outlook for NSPM reflect the company's strong credit metrics, supportive regulatory environments, and a robust regional economy. The ratings and Outlook also consider NSPM's linkage to its parent, Xcel Energy, Inc. (XEL) (senior unsecured 'BBB+'; Outlook Stable), and to Northern States Power Company (WI) (senior unsecured 'A'; Outlook Stable) through an integrated generation and transmission system. The Stable Rating Outlook reflects Fitch's expectation that planned capital spending of approximately $900 million in 2006 and $700 million in 2007, and dividend payments to XEL of $200 million to $225 million per year, may place mild pressure on credit metrics in 2006 and 2007. The capital spending program consists primarily of Minnesota Public Utility Commission (MPUC MPUC Maine Public Utilities Commission MPUC Minnesota Public Utilities Commission MPUC Mission Planning Users Conference ) approved investments, including the Metro Emission Reduction Project, which is the conversion of two existing plants from coal to gas and the installation of pollution control equipment at a third coal plant. Legislation passed last year allows NSPM to earn a cash return on its construction work-in-progress, and recover costs of investments in transmission and environmental upgrades. Fitch expects operating cash flows net of dividends will cover approximately 45%-55% of capital expenditures, and that NSPM will fund the shortfall through the new first mortgage bonds and equity contributions from XEL. For 2006, Fitch projects that the company's credit metrics will remain strong relative to both peers and its rating category, with funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. interest coverage in the range of approximately 4.5 times (x) to 5.5x, and total debt to cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses in the approximately 4x to 5x range. NSPM is a regulated integrated utility serving approximately 1.3 million electric customers in MN, ND and SD, and 457,000 natural gas customers in MN and ND. The company is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Xcel Energy, Inc. 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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