The CP notes are general unsecured obligations of GVEC.
KEY RATING DRIVERS
SUBSTANTIAL LIQUIDITY AND STRONG LONG-TERM RATING: The 'F1+' rating on the CP note program broadly reflects GVEC's substantial liquidity sources, including a
TIMING COULD BE A CONCERN: Although liquidity facilities are in place, the timing provisions in GVEC's note program and credit facility agreements could provide a limited window for fully accessing bank funds in the very unlikely event of a failed rollover.
GROWING DISTRIBUTION SYSTEM: GVEC is a transmission and distribution cooperative whose service area benefits from being located east of
EVOLVING POWER SUPPLY: GVEC has given its long-standing energy supplier,
SOLID FINANCIAL METRICS: GVEC's financial metrics compare well to similarly rated retail distribution systems with debt service coverage (DSC) of 2.87x in FY 2013 (1.47x coverage of full obligations) and a reasonable debt-to-FADS of 4.8x. Days cash on hand is light (50 days), but overall liquidity is stronger (287 days). Equity to capitalization, at 53.2%, is in line with the group median.
HEIGHTENED TIMING CONCERNS: Heightened concerns as to GVEC's ability to fully access its credit facilities in a timely manner could result in downward rating pressure.
FAILURE TO MANAGE EVOLVING POWER SUPPLY: GVEC's inability to manage its evolving power supply could exert additional downward pressure on the long-term rating, thereby weakening support for the short-term rating.
AMPLE LIQUIDITY SOURCES
The 'F1+' is supported by a standby credit facility with CoBank for
These facilities, coupled with GVEC's unrestricted cash and investments (
SOLID FINANCIAL PERFORMANCE
Total outstanding debt approximates
Additional information is available at 'www.fitchratings.com'.
This rating action was informed by the sources of information identified in Fitch's U.S. Public Power Rating Criteria, Criteria for Assigning Short-Term Ratings Based on Internal Liquidity, and Revenue-Supported Rating Criteria.
--'U.S. Public Power Rating Criteria',
--'Rating U.S. Public Finance Short-Term Debt',
U.S. Public Power Rating Criteria
Rating U.S. Public Finance Short-Term Debt
Source: Fitch Ratings
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