Fitch & Moody’s Upgrade Bond Ratings for Minnesota Municipal Power Agency
September 17, 2018
Fitch Ratings and Moody’s Investor Services have each upgraded their bond ratings for the Minnesota Municipal Power Agency (MMPA). The rating increases support the Agency’s long-term goals and strengthen MMPA’s position for the future.
MMPA provides wholesale electricity to its member communities, which in turn deliver and sell that electricity to residential and business customers in their communities. Members include municipal utilities in Anoka, Arlington, Brownton, Buffalo, Chaska, East Grand Forks, Elk River, Le Sueur, North St. Paul, Olivia, Shakopee and Winthrop.
Fitch upgraded MMPA’s bond rating from “A” to “A+.” In its rating commentary, Fitch cited MMPA’s strong financial performance, effective management, and competitive rates in upgrading its rating of MMPA.
Moody’s upgraded MMPA’s bond rating from “A2” to “A1.” This upgrade represents the second time in four years that Moody’s has upgraded MMPA’s bond rating.
David Niles, Vice President of MMPA’s management partner Avant Energy, said, “The strong ratings from both agencies demonstrate MMPA’s financial strength.”
Contributing to the ratings upgrades was MMPA’s retirement of more than $32 million of debt in 2017, including the prepayment of $22 million of its Series 2007 bonds. By extinguishing this debt, the Agency avoided paying nearly $13 million in interest expense over the next twenty years, resulting in lower rates to members.
From its inception, MMPA’s management partner has been Avant Energy, a Minneapolis-based energy management company with over 30 years of experience in consulting, utility management, trading, and project development services.