Fitch Rating has upgraded its credit rating for Overton Power District #5 to “A-“ from “BBB+” according to OPD officials. OPD5’s rating takes into account approximately $48.5 million of secured debt privately held by National Rural Utilities Cooperative Finance Corp., but is assigned to implied obligations given that none of the outstanding debt is publicly held.Fitch’s rating outlook was revised to “Stable” from “Positive.”
The report notes that OPD serves approximately 14,800 customers with the top 10 customers accounting for approximately 21.3% of operating revenues in 2015.
The district’s new power supply contract with Morgan Stanley Capital Group, Inc. took effect in June 2016 and extends to the end of 2024. The medium-term contract extends beyond the district’s normal five-year agreements, and provides a lower cost of power compared with the previous arrangement. The district’s future debt plans are significant with a tentatively planned $80 million issuance by 2022 to finance a cost-saving transmission project.