Nashville, Tenn. – Standard & Poor’s rated Nashville Electric Service (NES) bonds AA+, the first time in the organization’s history that NES has received an AA+ rating. NES and Palo Alto Combined Utilities are the only two public power utilities in the nation with a AA+ rating from S&P. In addition, Fitch reaffirmed the utility’s AA rating.
NES President & CEO Decosta Jenkins said that he is “gratified that these respected rating agencies express such a high level of confidence in our ability to succeed. Our commitment is to deliver the highest level of customer service and reliability at the lowest reasonable price.”
The rating agencies cited a stable and experienced management team at NES which has implemented consistently strong financial metrics, including good debt service coverage and competitive rates, as reasons for the high ratings. Other strengths include the area’s economic stability and steady customer growth, as well as a long-term contract with the Tennessee Valley Authority (TVA) which supplies NES with reasonably low-cost power.
NES will issue $120 million in 2008 Series A electric system revenue bonds and $95 million in 2008 Series B electric system revenue refunding bonds which are expected to sell June 5, 2008. Proceeds of the 2008 A bonds will be used to finance the cost of system expansions and improvements, and proceeds of 2008 B will be used to refund portions of outstanding bonds. NES will have $548 million of debt outstanding.