Moody's Affirms Aa3 Rating for Western Minnesota Municipal Power Agency

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Moody's Affirms Aa3 Rating for Western Minnesota Municipal Power Agency

October 10, 2017

SIOUX FALLS, S.D. – Moody’s Investors Service has affirmed its Aa3 rating for Western Minnesota Municipal Power Agency (WMMPA) Power Supply Revenue Bonds as well as its stable outlook for the organization.

WMMPA provides financing for and is the owner of electric generation, transmission, and other facilities that are used by Missouri River Energy Services (MRES) to serve its 60 member municipal electric systems in the states of Iowa, Minnesota, North Dakota, and South Dakota.

The Aa3 rating “reflects our fundamental view of the consolidated credit quality of MRES, which is the ultimate source of repayment for the WMMPA bonds,” Moody’s said in its report. “The rating considers the agency's sound financial policies which have resulted in ample liquidity and strong debt service coverage for the WMMPA bond holders.”

Moody’s also pointed to the low cost of power for MRES members as well as the diversity and overall credit quality of those member utility systems. “The rating also considers the steps the agency has taken to ensure future capacity and improve resource diversity, such as the construction of the Red Rock Hydroelectric Project, as well as the risk mitigation techniques being employed to manage this significant construction risk,” Moody’s said.

The stable outlook reflects MRES and WMMPA's solid financial profile and disciplined reserve policies, which provide ample cushion to address unexpected operational, construction or market related issues, according to Moody’s.

WMMPA, which has 23 Minnesota members, all of which also are members of MRES, is one of just a few joint-action agencies from across the country to earn a Moody’s rating in the double-A category and it is the only one in the Midwest.

WMMPA also holds a rating of AA- with a stable outlook from Fitch Ratings.