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MOODY'S RAISES RATING ON PLATTE RIVER POWER AUTHORITY, COLORADO POWER REVENUE BONDS AND ELECTRIC REVENUE BONDS TO Aa FROM A1

    NEW YORK, Nov. 16 ~PRNewswire~ -- In conjunction with an upcoming sale of $114.5 revenue refunding bonds as of Nov. 13, 1992, Moody's raised the rating on the Platte River Power Authority's (PRPA) outstanding $245.7 million Electric Revenue bonds and $399.2 million Power Revenue bonds to Aa from A1.  In raising the rating, Moody's said, "Continued economic growth among the authority's four member municipalities (Fort Collins, Loveland, Longmont, Estes Park) has resulted in increased power sales to municipalities and decreasing amounts of marketed surplus power, and maintenance of a favorable financial position.  Low power production costs and strong cash flow has enabled PRPA to maintain relatively low rates while funding a rate stabilization account, cash defeasing approximately $62 million in bonded debt in 1990, and accumulating an additional $73 million for a possible cash defeasance of a portion of outstanding electric revenue bonds in 1993, depending on market conditions.  The relatively strong and growing economies of the member participants, satisfactory debt service coverage, and demonstrated ability to market low cost surplus power, which continues to comprise a major portion of operating revenues, are primary factors in the revised rating.  A recently renegotiated contract with Public Service of Colorado now extends through 2004, and accounts for virtually all surplus power produced. Participant's electric distribution systems show stable financial operations and, with the exception of Loveland, are essentially debt free.  PRPA's debt levels continue to decline following the authority's construction period, and no new money borrowing is planned.  Existing generation capacity is projected to be sufficient for the foreseeable future.  While the current issue is secured by a lien on net system revenues subordinate to outstanding electric revenue bonds, no additional senior lien debt is permitted under the closed electric revenue bond resolution.  The current issue advance refunds a portion of outstanding senior lien debt at a net present value savings, with no extension or deferral of principal.
    An initiative to amend the State Constitution, known locally as the Taxpayer's Bill of Rights (TABOR), was passed in the Nov. 3 General Election.  The amendment will significantly affect the financial and debt management practices of the state and all local levels of government, with the exception of certain defined enterprise systems. In general, the amendment limits yearly increases in government expenditures and revenues to an inflation based formula, and requires advance voter approval for a variety of debt instruments not previously requiring authorization by referendum.  Various provisions of the amendment are unclear and subject to interpretation.  Bond counsel for the current issuance has opined that PRPA constitutes an exempt enterprise system.  However, the municipalities electric distribution systems may covered by the provisions of the amendment.  Such a finding could result in long-term credit deterioration of the participants, and potentially of PRPA.
    -0-             11~16~92
    CONTACT:  Adam Whiteman, vice president, 212-553-7809, Craig Atwater, vice president, 212-553-0327, or Ditmar Kopf, assistant vice president, 212-553-4837, all of Moody's CO:  PLATTE RIVER POWER AUTHORITY SU:  RTG ST:  CO


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Publication:PR Newswire
Date:Nov 16, 1992
Words:499
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