Riverside, Calif. – Fitch Ratings recently affirmed their AA- rating on a series of Riverside Public Utilities’ (RPU) electric revenue bonds, and stated that the rating outlook for the community-owned utility remains stable.
The rating firm affirmed the utility’s $399.7 million of series 2003, 2004A, 2008D, 2009A (taxable Build America Bonds), and 2010B bonds, as well as its underlying rating on $139.6 million in variable rate series 2008A and 2008C bonds.
Bonds are secured by a net revenue pledge of RPU’s electric system which serves over 300,000 customers in the southern California city of Riverside.
Fisk reported that RPU’s financial margins “remain solid despite some declines in fiscals 2011 and 2012 related to flat revenues, slight cost increases, and higher debt service. Debt service coverage in fiscal 2012 was 1.97x or 1.38x after the transfer to the city's general fund and should remain at or above these levels over the next five years. Liquidity levels remain strong.”
Cost pressures are limited in the near-term for the utility and no additional rate increases are anticipated through 2014 resulting in RPU extending its electric rate freeze for its customers for two additional years.