Fitch Ratings on April 30 notified the Illinois Municipal Electric Agency that IMEA’s long-term debt was affirmed as an “AA- rating with a Stable Outlook.”
“This AA- rating is the latest in a string of exemplary affirmations from Fitch, one of the three credit rating agencies that review the overall credit quality of the IMEA bonds,” IMEA noted.
Fitch’s top-tier affirmation comes as IMEA prepares to refinance its last remaining Power Supply System debt that will be paid off by 2035.
When an entity issues bonds, having a better rating equates to a better term for borrowing, so this affirmation will serve the Agency well in the refinancing process, IMEA pointed out.
The Agency estimates that refinancing will save millions in interest payments. That savings will directly benefit all 32 IMEA member municipalities.
Fitch’s rating and outlook took many factors into account, reviewing Illinois’ clean energy legislation and the impact of EPA power plant standards on IMEA’s long-term obligations and opportunities.
The main component of the rating release details the three rating drivers -- revenue defensibility, operating risk, and financial profile.
IMEA’s revenue defensibility is listed as very strong due to long-term power supply contracts with members, autonomous rate-setting authority, and strong underlying credit quality of the members.
Operating Risk is listed as strong and is attributed to IMEA’s low operating cost burden and access to a diverse mix of available purchased power and owned generation resources.
Fitch states that the final rating driver, IMEA’s financial profile, is “very strong” and credits IMEA’s consistently healthy operating performance, robust liquidity levels, and very low leverage.
The fact that IMEA has continued to maintain AA- ratings since the upgrade to this top rating tier in 2021 speaks to the sound decisions made by the IMEA Board, IMEA said.
The IMEA board is comprised of a representative from each of the Agency’s 32 member municipalities who make all major decisions about every aspect of their community’s wholesale power supply resources and services.
