CPW bonds receive ‘A+’ rating
Standard & Poors Global Ratings (S&P) announced on December 19, 2016 an affirmation of the Greer Commission of Public Works’ (CPW) rating of A+, with a stable outlook. The underlying rating is based on $49.3 million of outstanding bonds issued since 2002. CPW’s bonds are secured by the net revenues of the combined utility consisting of gas, electric, water and wastewater utilities.
S&P takes into consideration several key factors to determine the strong financial rating. The combined revenues from the four utilities of CPW creates a diverse revenue stream which mitigates the risk of one sector underperforming. The ability for CPW to return payment on its outstanding debt, also known as Debt service coverage, continues to remain strong. CPW is a member of the joint action agency, Piedmont Municipal Power Agency (PMPA), for which CPW primarily purchases its power. In consideration with CPW’s debt, this joint membership carries a contractual commitment related to the debt of PMPA that is not required to be shown on the financials of CPW. The ability for CPW to meets its debt service requirements, along with the ability to meet its portion of the PMPA associated debt, has remained strong for the past 3 years and is projected to remain strong for the next 5 years. Competitive electric rates, along with a purchased power adjustment policy, is also factored into the rating.
The continued economic growth in this region continues to be a factor in the ratings. Favorable unemployment rates, customer growth and the regions stability continue to be a positive factor for CPW’s rating.
“Our staff and Board of Commissioners continue to make strategic decisions that impact our ratings in a positive manner,” said Chuck Reynolds, CPW’s Manager of Finance and Administration. “Managing the pendulum of issuing debt and pay-as-you-go funding for capital projects helps to keep the right balance for our customers, while lowering the impact of issuing debt. We remain committed to our fiduciary responsibilities for Greer CPW.”
“The S&P rating is a strong indicator of our financial ability to fulfill our obligations,” said Perry J. Williams, Chairman, Greer Commission of Public Works. “Having our rating reaffirmed gives our customers confidence in our commitment to maintaining stability and creating long-term value for them.”
CPW conducts presentations to the rating agencies each year to update them on the financial and operational successes from the most recent fiscal year, while also discussing upcoming financial projections and strategies. A strong financial rating means costs savings when CPW elects to issue debt to fund capital projects.