 Seattle City Light
News Release |
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| Subject:
Mayor announces Seattle City Light bond rating increase to A+ |
For Immediate Release:
9/7/2006 4:00:00 PM |
For More Information Contact:
Suzanne Hartman (206) 615-0050
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Mayor announces Seattle City Light bond rating increase to A+
More good news for City Light as bond agency
sees improved financial performance
SEATTLE- Mayor Greg Nickels announced today that Standard & Poor (S&P)
has upgraded Seattle City Light’s bond rating from A to A+, stable outlook.
The higher rating is good news for ratepayers and an independent vote of confidence
in the direction of City Light.
“Higher bond rating means lower interest rates, and that saves money
for the utility and, ultimately, the rate payers,” Nickels said. “This
is a great step forward for City Light and a tremendous validation of the financial
management changes made under City Light Superintendent Jorge Carrasco over
the past two years.”
Nickels recently proposed the largest rate cut in 35 year based on the utilities’ stronger
financial position.
The bond rating for City Light was reduced several times after the on-set
of the West Coast energy crisis in 2000. In January 2001, City Light received
an AA-/Negative rating. By July, 2003, the rating had dropped to A/Negative.
The turnaround began in December, 2004 with an A/Positive rating and has continued
to climb to today’s rating announcement
Today’s action by S&P is recognition that the utility is in stronger
financial condition. The raised rating is based on the city’s adoption
of strong financial policies and continued financial improvement as evidenced
by its lower debt leverage, strong cash flow coverage, and strong liquidity.
“Seattle City Light’s improved financial metrics and rate-setting
policies were the basis for the raised rating,” said Standard & Poor's
credit analyst Leo Carrillo. “The paramount rating factor remains Seattle’s
willingness to adjust rates to support financial strength, which the city has
demonstrated convincingly since implementing very large rate increases in 2001.”
“We are delighted with S&P’s endorsement of the measures we’ve
adopted that have produced convincing financial results,” added Superintendent
Jorge Carrasco. “Our goal has been to get costs under control, to stop
relying on borrowing to keep rates low and to develop a risk management strategy
that produces higher wholesale revenues. We intend to provide Seattle ratepayers
with the best customer service and best performing utility in the country.
Through the hard work of our employees, we have taken major steps in the right
direction.”
City Light hasn’t borrowed money since 2004 and isn’t forecast
to borrow funds until late 2008. When the utility does seek funds for planned
capital expenditures, it will be in a more favorable position. In the next
two years, the utility plans to pay-down its long-term debt by an additional
$100 million, improving its borrowing capability.
City Light’s proposed 4.8% rate decreased is currently under consideration
by the Seattle City Council. A public hearing is scheduled for October 9th
at 5:30 p.m. in Council Chambers. For more information on the Council’s
rate review process please see http://www.seattle.gov/council/issues/rates.htm
Please visit the mayor’s web site at www.seattle.gov/mayor. Get the
mayor’s inside view on efforts to promote transportation, public safety,
economic opportunity and healthy communities by signing up for The Nickels
Newsletter at www.seattle.gov/mayor/newsletter_signup.htm
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Office of the Mayor
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