Fitch Ratings has upgraded the Connecticut Municipal Electric Energy Cooperative's (CMEEC) Issuer Default Rating from “A+” to “AA-“.
Fitch has also upgraded the ratings of the outstanding bonds of CMEEC and its sister organization, the Connecticut Transmission Municipal Electric Energy Cooperative, from ‘A+’ to ‘AA-’, CMEEC reported.
In addition, Fitch assigned the “AA-“ rating to the forward delivery refunding bonds that were priced by CMEEC and Transco in late April, which will be used to refund existing debt and will result in more than $9 million in net present value savings on interest payments over the life of the debt, and will also have a positive impact on transmission revenues.
In its review, Fitch noted that the upgrade reflects, “Continued improvement in financial performance, with ample liquidity, limited capex and a declining debt burden. Favorably, CMEEC has implemented many changes to its internal controls and addressed management and governance issues, stemming from the federal indictment of former utility officials and board members in 2018.”
CMEEC and Connecticut Transmission Municipal Electric Energy Cooperative were also given a rating outlook of Stable.
“We believe Fitch recognized the great steps that CMEEC and its Board have taken over the past year to strengthen corporate governance and re-focus its attention on strategic planning in order to satisfy its core mission of delivering safe and reliable power at a reasonable cost,” CMEEC Chief Executive Officer Dave Meisinger said.
“The fact that this ratings upgrade occurred during the uncertainty of the COVID-19 pandemic only further illustrates the strength of CMEEC’s financial metrics and the overall strong results achieved due to the perseverance of CMEEC’s staff,” he said.
Kevin Barber, Chairperson of the CMEEC Board of Directors, echoed this sentiment and added that, “I see this as another indication that CMEEC has turned a corner with its re-dedication to strong corporate governance and controls, and has also turned a page in its history by moving ahead with new leadership and a renewed sense of purpose and values. We will continue to remember and learn from our past, but it will not define our future.”
Meisinger concluded that, “This upgrade helps ensure that CMEEC and its member municipal electric utilities will have competitive access to financial markets, which further positions the CMEEC members to maintain their low retail electric rates.”
CMEEC’s member municipal electric utilities include the Jewett City Department of Public Utilities, Norwich Public Utilities, Groton Utilities, Bozrah Light & Power, Third Taxing District of the City of Norwalk and South Norwalk Electric and Water.
