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MOODY'S ASSIGNS 'Aa' RATING TO SEATTLE'S SALE OF $180,245,000 LIGHT AND POWER REVENUE BONDS

 MOODY'S ASSIGNS 'Aa' RATING TO SEATTLE'S SALE OF
 $180,245,000 LIGHT AND POWER REVENUE BONDS
 NEW YORK, Aug. 11 /PRNewswire/ -- Effective today, Moody's Investor Service has assigned a 'Aa' rating to $100 million of Seattle Light and Power revenue bonds series A and $80,245,000 of series B parity refunding bonds. In assigning the high grade rating the agency noted that "High quality security for the issuance of prior lien revenue bonds is provided by the system's more than adequate coverage of debt service requirements and the stable and increasingly diverse service area. Additional favorable credit factors include the system's abundant sources of low-cost energy and low rates -- even in comparison to the generally low rates throughout the Pacific Northwest -- due to the ability to generate a large portion of its own energy requirements, from low cost hydroelectric projects."
 Moody's also noted that while energy costs are low, the likelihood of significant future rate increases has also been noted, due in part to the department's substantial capital improvement program, the increasing costs of purchased power, and the possibility of additional rate increases throughout the region due to environmental concerns.
 While the city attempted to defer a needed rate increase in 1992 by shifting the definition of the winter rate period, thereby creating a one-time windfall, a dry mild winter has reduced water flows due to the small snow pack. The resulting inability to generate surplus energy for sale, and the need for increased power purchases, resulted in a sharp decline in net revenues for the current fiscal year. While city council has reacted to the anticipated shortfall by enacting a temporary surcharge through April, the willingness to enact long-term rate increases sufficient to ensure sustained ability to meet the agency's targeted 1.8 times debt service margin will continue to be monitored. The authorizing ordinance for the current issue proposes acceptable modifications to the legal covenants of the city.
 -0- 8/11/92
 /CONTACT: Nikolai J. Sklaroff of Moody's, 415-274-1741/ CO: Moody's ST: New York IN: UTI SU: RTG


LD-TM -- NY100 -- 9180 08/11/92 19:03 EDT
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Publication:PR Newswire
Date:Aug 11, 1992
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