Moody’s Investor Service has assigned investment grade issuer and debt ratings for Central Vermont Public Service. CVPS calls this an important step as the company prepares for Vermont’s energy future. The company has been focused on improving its credit matrices and ratings, which have been rated at below investment grade by Standard and Poor’s for several years, so these ratings signal an improved view of the company on Wall Street. The action affects approximately $177 million in securities. Moody's assigned a Baa3 issuer rating and a Baa1 senior secured rating to CVPS' currently outstanding first mortgage bonds, which were previously unrated by Moody's. It also affirmed CVPS' Ba2 preferred stock rating and the company's current stable rating outlook.
These ratings are critical to the company as it prepares to make significant investments in capital projects in the next few years, aimed at continually improving service quality and reliability, and as it signs new power supply contracts. The ratings should allow CVPS to borrow capital at lower rates than we could otherwise expect to receive, and will reduce or eliminate the need to put up collateral in many power purchase and power sales contracts. In some cases, power contract counterparties will not do business with a non-investment grade credit, so this expands CVPS' options as it looks to secure new power supply in the future. Ultimately, these improved ratings should mean savings for customers.
President Bob Young welcomed the news, saying it capped several years of work to improve the company’s credit, and praised regulators for their efforts as well.
“Moody’s clearly sees that we are working well with the Department of Public Service and Public Service Board on behalf of our customers, which along with the credit measures is a critical issue for ratings agencies,” Young said. “Vermont’s regulators have been very helpful as we’ve worked to address our credit issues, on customers’ behalf.”
Part of Moody's press release is pasted below and the full document is attached.
Source: CVPS. 12.4.2009
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CVPS_Moodys_PressRelease_December_4_2009.pdf51.72 KB