Power Co-Op Gets Bond Rating Upgrade After Exiting Kemper Deal
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Cooperative Energy bond rating upgrade signals lower debt costs as Fitch lifts GO Zone Bonds to A, reflecting Kemper exit, shift to owned generation, natural gas, and renewable energy for co-op members and borrowing rates.
Breaking Down the Details
Fitch raised Cooperative Energy's GO Zone Bonds to A, cutting debt costs after Kemper exit and shift to natural gas.
Fitch raises 2009A GO Zone bonds from A- to A.
$35.4M issue sees lower debt service costs.
Exit from Kemper stake improved credit profile.
Shift to gas and renewables reduces risk.
Cooperative Energy and its 11 co-op members will see lower debt costs on $35.4 million bond; similar to regional utilities offering one-time bill decreases for customers recently.
Bailing out of its 15 percent ownership stake in Mississippi Power’s Kemper gasification plant, amid debates over coal and nuclear subsidies in federal policy, has helped Hattiesburg-based Cooperative Energy gain a ratings upgrade on a $35.4 million bond issue.
The electric power co-op, which changed its name to Cooperative Energy from South Mississippi Electric Power Association in November, received a ratings upgrade from A- to A for its 2009 2009A Mississippi Business Finance Corporation Gulf Opportunity Zone Bonds, even as other utilities announced bill reductions for customers during 2020.
“This rating upgrade reflects the success of our strategy to move from purchased power to owned generation resources, and from coal to natural gas and renewable energy as clean energy priorities gain traction,” said Cooperative Energy President/CEO Jim Compton in a press release. “The result for our members is lower borrowing costs and more favorable rates.”
An “A” rating from Fitch designates the bond issue as “near premium quality,” a status noted as utilities adapted to pandemic-era electricity demand trends nationwide.
