Fitch Boosts Rating to AA- Citing Power Agency’s Strong Financial, Operational Results
ORLANDO, Fla., Oct. 21, 2019 – Fitch Ratings announced a credit rating upgrade for the Florida Municipal Power Agency (FMPA) to ‘AA-‘ from ‘A+’ ahead of the Orlando-based power agency’s planned bond refinancing in late-October.
In granting the coveted upgrade to double-A, Fitch pointed to the strong financial performance and competitive rates of FMPA’s All-Requirements Project. According to Fitch, the upgrade was influenced by:
- Credit quality of the cities that purchase electricity from FMPA
- FMPA’s low-cost and diverse power supply resources
- FMPA’s very strong financial profile
A higher credit rating typically results in lower borrowing costs. FMPA is a not-for-profit wholesale power supplier, so lower financing costs are passed along to the 13 municipal utilities that purchase power from FMPA’s All-Requirements Project, including Bushnell, Clewiston, Fort Meade, Fort Pierce, Green Cove Springs, Havana, Jacksonville Beach, Key West, Kissimmee, Leesburg, Newberry, Ocala and Starke.
FMPA’s governing board approved the approximate $81 million bond issue on Oct. 17. The bonds are expected to sell during the week of Oct. 21.
The new bonds will refund outstanding bonds of FMPA. This refinancing is a continuation of FMPA’s strategy to enhance its financial position by eliminating interest-rate swaps, increasing its fixed-rate debt and paying-off debt early.