Bonds and Financing

Moody’s, S&P affirm strong credit ratings for OPPD

Moody’s Investors Service and S&P Global recently affirmed strong ratings on long-term bonds and short-term debt for Omaha Public Power District (OPPD), the Nebraska public power utility reported on July 1.

Moody’s credit opinion affirmed OPPD’s Aa2 senior bond rating, Aa3 subordinate bond rating, and P-1 commercial paper (CP) rating with a stable outlook. It pointed to OPPD’s strengths in maintaining competitive rates, as well as sound debt service coverage (DSC) and liquidity. Over the last two years, OPPD has achieved DSC averaging 2.37x, while days’ cash on-hand has averaged around 180 days.

The utility’s credit quality, Moody’s noted, is further supported by its location in an all-public-power state. The agency also praised the utility’s strong 13-county southeast Nebraska service area, which has proven resilient through economic cycles.

Meanwhile, S&P affirmed OPPD’s AA senior bond rating, AA- subordinate bond rating, and A-1+ CP rating.

At the end of 2020, the utility had $1.7 billion of senior- and subordinate-lien bonds outstanding, and $250 million CP notes. In March, OPPD increased its CP authorization to $350 million (from $250 million), and secured an additional $200 million line of credit, bringing total liquidity facilities to $450 million.

The district’s key strengths that S&P points to include, “a strong and diverse customer base supported by an economically sound service area, the district’s proven ability to maintain robust coverage of fixed charges, and substantial liquidity.”

S&P called OPPD’s enterprise risk profile “very strong.” Contributing factors include a deep and diverse customer base, as well as plans to lower carbon intensity, while adding up to 600 megawatts of solar generation with natural gas backup.

Like Moody’s, S&P also noted that OPPD is in a strong market position with its competitive rates.