2008-06-06 23:42:29 -
- Fitch Ratings has assigned an underlying 'A' rating to Texas Municipal Power Agency's (TMPA) $36,730,000 revenue refunding bonds, series 2008. Maturing in 2017, the subordinate lien bonds will be used to refund callable principal of its 2009 debt service. The bonds are expected to price June 23, 2008. The Rating Outlook is Stable.
Fitch has also affirmed the
outstanding 'A' rating and Stable Outlook on TMPA's senior power supply revenue bonds and subordinate lien electric system revenue bonds as well as the 'F1' rating on TMPA's power supply revenue bonds (commercial paper notes).
The 'A' rating and Stable Outlook is based upon the following factors:
--Credit profile of TMPA's four members: Bryan (Bryan Texas Utilities; rated 'A+' with a Stable Outlook by Fitch), Garland (Garland Power and Light; rated 'A' with a Positive Outlook), and Greenville (GOs rated 'A+' with a Stable Outlook);
--Long-term, unconditional take-or-pay contracts that are paid as operating expenses of the member's retail electric systems;
--Strong operating performance of the Gibbons Creek coal-fired plant serving as a stable, low-cost source of energy;
--Single-unit risk of members receiving the majority of their energy through the Gibbons Creek coal-fired generator.
The following credit drivers that could affect the rating:
--Members' ability to maintain stable financial profiles in an environment of increasing energy costs;
--Cost and ultimate effect of potential requirements to reduce CO2.
TMPA is a joint action agency that provides wholesale power to its four member cities of Bryan, Denton, Garland, and Greenville, Texas. TMPA owns and operates the Gibbons Creek station, a coal-fired generating plant with a net generating capacity of 462 mega watts (MWs). Through unconditional take-or-pay contracts, each city is obligated to pay the costs of TMPA, regardless of plant operations, on the following proportional basis: Garland 47%, Bryan 21.7%, Denton 21.3%, and Greenville 10%.
Fitch's rating definitions and the terms of use 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 are also available from the 'Code of Conduct' section of this site.
Fitch Ratings, New York
Yvette M. Dennis, +1-212-908-0668
Karl Pfeil, III, +1-212-908-0516
Christopher Kimble, +1-212-908-0226 (Media Relations)
