Fitch Affirms Nebraska Public Power Dist's Commercial Paper Program at 'F1+'
NEW YORK -- January 24, 2013
Fitch Ratings has affirmed the 'F1+' rating on Nebraska Public Power
District's (NPPD, or the district) up to $150 million commercial paper (CP)
notes, series A.
The CP notes are secured by funds pledged under the resolution, including net
revenues of the district. The notes are subordinate to the pledge securing
NPPD's approximately $2 billion of outstanding general revenue bonds.
ROBUST LIQUIDITY: The 'F1+' rating on the CP program is supported by NPPD's
ample internal liquidity sources - including a $150 million revolving credit
facility - equal to approximately 3.5x potential liquidity needs, as of Dec.
31, 2012. The district's own cash and cash equivalents provide 1.3x the
maximum size of the CP program.
GOOD LONG-TERM CREDIT CHARACTERISTICS: A stable financial performance,
diversifying power supply, and strong service territory underpin the 'A+'
long-term rating on NPPD's general revenue bonds.
EXPIRATION OF WHOLESALE POWER CONTRACTS: Contract renewals with NPPD's
wholesale customers, who provide about 50% of the district's operating
revenues, will be a critical factor in future rating reviews. Most existing
wholesale contracts expire on Dec. 31, 2021.
AMPLE INTERNAL LIQUIDITY
NPPD's ample internal liquidity, coupled with its good long-term credit
characteristics, support Fitch's 'F1+' rating on the CP program. Liquidity
sources include the district's own cash and investments, as well as a $150
million revolving credit facility provided by the Bank of Nova Scotia ($100
million, rated 'AA-/F1+' by Fitch) and U.S. Bank ($50 million, rated
'AA-/F1+'). The credit facility, which by resolution is sized to the maximum
authorized amount of the CP notes, covers principal payments if rollover
proceeds are insufficient to pay amounts due at maturity. The facility expires
on Aug. 1, 2014, barring certain events of default that Fitch considers
INTEGRATED WHOLESALE AND RETAIL PROVIDER
NPPD provides wholesale and retail electric service to non-metropolitan
Nebraska. The district provides generation, transmission, and distribution
services to approximately 89,000 retail customers, 52 municipal wholesale
customers, and 25 public power and electric cooperative customers.
Most of NPPD's long-term wholesale contracts expire at the end of 2021, and
management is in the early stages of renewal discussions with these customers.
The agreements remain in force thereafter from year to year unless terminated
by either party on specified dates, pursuant to the contracts.
For additional information on NPPD's 'A+' long-term rating, see Fitch's press
release dated Oct. 11, 2012.
Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.
This rating action was informed by information in Fitch's U.S. Public Power
Rating Criteria, Criteria for Assigning Short-Term Ratings Based on Internal
Liquidity, and Revenue-Supported Rating Criteria.
Applicable Criteria and Related Research:
--'U.S. Public Power Rating Criteria', Dec. 18, 2012;
--'Fitch Rates Nebraska Public Power Dist's $211.1MM 2012 Series B and C Bonds
'A+'; Outlook Stable', Oct. 11, 2012;
--'Criteria for Assigning Short-Term Ratings Based on Internal Liquidity',
June 15, 2012;
--'Revenue-Supported Rating Criteria', June 12, 2012.
Applicable Criteria and Related Research:
Criteria for Assigning Short-Term Ratings Based on Internal Liquidity
Revenue-Supported Rating Criteria
U.S. Public Power Rating Criteria
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Alan Spen, +1-212-908-0594
One State Street Plaza
New York, NY 10004
Ryan A. Greene, +1-212-908-0593
Dennis Pidherny, +1-212-908-0738
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