Fitch Ratings affirmed the A+ outlook on $1.74 billion in utility system revenue bonds for Gainesville Regional Utilities on May 9, citing a strong financial profile due largely to a “significant” reduction in the utility’s general fund transfer payments to the city and affordable rates.
In its Rating Action Commentary, Fitch says GRU’s rating and outlook are contingent on “GRU’s ability to execute its current financial plan, including maintenance of strong operating income levels and the utility’s lower general fund transfers approved last year.”
Fitch notes that GRU’s debt-leverage ratio declined from a high of 11.9 times in FY23 to a five-year low of 8.8 times in FY24 thanks primarily to the reduced fund transfers and accelerated debt payments.
Additionally, Fitch praises the Gainesville Regional Utilities Authority, which, it asserts, has been “functioning effectively since its appointment on May 16, 2024.”
“This is great news for our customers,” said GRU CEO Ed Bielarski. “With the support of the GRU Authority, we have reduced debt and made rates more affordable. This commentary further affirms that we are headed in the right direction.”
One of three bond-rating agencies along with S&P Global and Moody’s, Fitch Ratings assesses GRU’s financial outlook on an ongoing basis and provides a report every 18 to 24 months.
The rating effects the utility’s cost to borrow money for capital projects and improvements and has a direct impact on bill affordability.
