Loup River Public Power District, NE Electric System Revenue Refunding Bond Rating Lowered Two Notches To 'A+'

CENTENNIAL (S&P Global Ratings) Sept. 5, 2019--S&P Global Ratings lowered its rating to 'A+' from 'AA' on the Loup River Public Power District, Neb.'s outstanding electric system revenue refunding bonds. The outlook is stable.
The lowered rating reflects our application of "U.S. Municipal Retail Electric And Gas Utilities" criteria, published Sept. 27, 2018, as well as our opinion of the district's strong enterprise profile and very strong financial risk profile.
"The lowered rating also reflects the district's concentrated customer base among industrial customers that are more susceptible to load loss, and our assessment of fixed-charge coverage, which, when applying the criteria, is not supportive of a higher rating," said S&P Global Ratings credit analyst Alexandra Rozgonyi. Fixed-charge coverage is S&P Global Ratings' coverage metric that treats a portion of power purchase payments as debt-like obligations.
The stable outlook reflects our anticipation that future fixed-charge coverage and unrestricted cash will not materially deviate from historical figures given the long-term all-requirements power supply agreement with Nebraska Public Power District, the district's pass-through of power costs to ratepayers, and the district's manageable capital needs during the next five years.
As of Dec. 31, 2018, the district supported about $25.8 million of electric system revenue debt.
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