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, FMPA said on Oct. 21.
In granting the upgrade to double-A, Fitch pointed to the strong financial performance and competitive rates of FMPA’s All-Requirements Project, FMPA noted.
The All-Requirements Project is FMPA’s largest power supply project and serves the power needs of 13 cities.
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 and FMPA’s very strong financial profile.
FMPA, which is a not-for-profit wholesale power supplier, noted that a higher credit rating typically results in lower borrowing costs.
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 and 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,” FMPA said in a news release.