"In our opinion, the ratings reflect a low-cost hydro-based generation portfolio that can meet demand under most water conditions, including the current low ones; a strong and diverse customer base; good financial management; and competitive retail rates, even after accounting for sizable rate increases in fiscal 2010," said Standard & Poor's credit analyst Peter Murphy.
The 2010A bonds will be sold as Build America Bonds, while the 2010C bonds will be sold as Recovery Zone Economic Development Bonds. Of the new issue, $569 million will refund existing debt; the rest will fund various systemwide capital improvements.
SCL is a municipally owned electric utility that provides service to approximately 395,000 customers in Seattle (AAA/Stable) and surrounding areas within King County, Wash., covering a population of 750,000. Debt outstanding totaled about $1.36 billion as of Dec. 31, 2009.
The stable outlook reflects Standard & Poor's expectation that SCL will increase liquidity and improve debt service coverage (DSC) levels through rate-stabilization policies, and more conservative wholesale revenue forecasting. We believe these improved financial practices will contribute to credit stability and make a negative outlook unlikely, as long as DSC remains consistently strong.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Electric Utility Ratings, June 15, 2007
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers atwww.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Peter V Murphy, New York (1) 212-438-2065
Ian Carroll, San Francisco (1) 415-371-5060