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Standard & Poor’s delivers high ratings for CU bonds

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Standard & Poor's Financial Services LLC issued high ratings for City Utilities of Springfield’s bond portfolio.

The utility was awarded an AA+ rating for its long-term outstanding revenue bonds and an AA long-term rating for its outstanding certificates of participation, according to a news release.

“The AA+ rating reflects our opinion of CU's very strong enterprise risk profile and extremely strong financial risk profile. The very strong enterprise risk profile reflects our view of CU's large customer base with significant revenue from residential accounts, competitive electric rates and a diverse resource portfolio,” S&P officials said when issuing the ratings. “Importantly, CU has excellent management, policies and planning. The extremely strong financial risk profile reflects our view of robust fixed-charge coverage, liquidity of more than 200 days when including funds in CU's designated improvement account and a low debt-to-capitalization ratio.”

AA is the second-highest credit rating issued by S&P. The plus sign indicates progress toward the top level, AAA, according to S&P’s website.

CU spokesman Joel Alexander said the utility had $485.8 million in outstanding revenue bonds and $73.1 million in outstanding certificates of participation as of Sept. 30, 2018, when its fiscal year ended. Investopedia defines the certificates as financing that comes from investors buying portions of lease revenues.


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