Fitch Ratings has affirmed the 'F1+' rating on Security
The CP notes are general unsecured obligations of GTC.
Key Rating Drivers
Sound Long-Term Rating and Liquidity: GTC's 'AA-' long-term credit rating (senior secured obligations) and ample liquidity sources support the 'F1+' on its CP program.
Solid Coverage: Total resources provided solid 1.5x coverage of maximum potential requirements in 2013 (averaged quarterly), including 1.64x at
Critical Service Provider: The corporation's more than
Sound Long-Term Characteristics: Take-or-pay, joint and several transmission service agreements with its member cooperatives extend through
Overall Stability Benefits Rating: The strength and stability of its long-term credit rating, coupled with its various liquidity sources, should continue to support the 'F1+' on GTC's CP program for the foreseeable future.
Ample Liquidity Sources
The CFC- and CoBank-led revolvers are for general corporate purposes. However, in practice GTC limits total draws by the amount of outstanding CP notes, as outlined in the 'Financial Condition' section of the corporation's 2012 audit. GTC's goal at all times is to maintain adequate financial support for the program.
GTC recently extended the CFC-led revolver by two years to
Events of default under the CFC-led revolver include material members representing greater than 20 percent of gross operating revenues and subsidiaries, of which GTC has neither.
Liquidation Procedures Plan
GTC has developed a liquidation procedures plan that broadly outlines how the corporation would manage a failed rollover of CP notes. Fitch views favorably the maintenance of such procedures to ensure the proper redemption of maturing CP.
The plan draws from bank authorizations, incumbency certificates, and related agreements to specify the timing of funding sequences and authorized personnel.
Broad Transmission Provider
GTC is a not-for-profit corporation providing transmission services to 38 of 41 distribution cooperatives in
GTC began operations in 1997 when OPC was divided into three separate entities. GTC became owner of the transmission assets, providing transmission service to its members; OPC retained control of power generation; and
For more information on GTC's 'AA-' long-term credit rating, see Fitch's report dated
Additional information is available at 'fitchratings.com'.
((Comments on this story may be sent to firstname.lastname@example.org))
Fitch Ratings has affirmed the 'F1+' rating on