News Column

Fitch Affirms & Withdraws Corn Belt Power Cooperative's 'A-' Sr. Secured Rating; Outlook Stable

July 24, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed and simultaneously withdrawn the 'A-' rating on Corn Belt Power Cooperative's (IA) (Corn Belt) implied senior secured obligations.

The Rating Outlook is Stable.

The rating is withdrawn as Fitch no longer considers it to be relevant to the agency's coverage.

KEY RATING DRIVERS

ENHANCED POWER SUPPLY ARRANGEMENT: Corn Belt improved its power supply program in 2009 by becoming a Class A member of Basin Electric Cooperative (Basin, rated 'A+' by Fitch). The supply agreement extends to 2050 and should meaningfully reduce Corn Belt's operating risk and provide more stable longer-term power costs to its members.

COMPETITIVE ELECTRIC RATES: Corn Belt's wholesale power rates are reasonable at around $70 per megawatt-hour (MWH), following an approximate 6.2% wholesale rate increase in January 2013. Rates will gradually rise to match increased costs related to Basin and fund moderate future expenditures for environmental controls. Members' rates are competitive with two neighboring investor-owned utilities and are in line with other area cooperatives.

SERVICE AREA SOLID: Corn Belt's member service territory enjoys below average unemployment, good wealth and high farm values. Corn is the main crop and production benefits from grain exports and solid prices. Ethanol is also an important component of the local economy.

FINANCIALS ADEQUATE: Historically, Corn Belt intentionally kept financial ratios low, sufficient to meet Rural Utilities Service borrowing covenants. More recently, however, Corn Belt's board adopted a more constructive financial policy, whereby coverage ratios have increased and equity as a percentage of capitalization and assets has grown.

For additional information, see Fitch's release dated Sept. 24, 2012.

Additional information is available at 'www.fitchratings.com'.

This rating action was informed by information identified in Fitch's Revenue Supported Rating Criteria and U.S. Public Power Rating Criteria.

Applicable Criteria and Related Research:

--'U.S. Public Power Peer Study -- June 2014' (June 13, 2014);

--'U.S. Public Power Peer Study Addendum - June 2014' (June 13, 2014);

--'U.S. Public Power Rating Criteria' (March 18, 2014);

--'2014 Outlook: U.S. Public Power and Electric Cooperative Sector' (Dec. 12, 2013).

Applicable Criteria and Related Research:

U.S. Public Power Peer Study -- June 2014

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749789

U.S. Public Power Peer Study Addendum - June 2014

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750283

U.S. Public Power Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=740841

2014 Outlook: U.S. Public Power and Electric Cooperative Sector (Calm Under Pressure)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=725447

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=841458

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Alan Spen

Senior Director

+1-212-908-0594

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Stacey Mawson

Associate Director

+1-212-908-0678

or

Committee Chairperson

Dennis Pidherny

Managing Director

+1-212-908-0738

or

Media Relations:

Elizabeth Fogerty, +1-212-908-0526

elizabeth.fogerty@fitchratings.com


Source: Fitch Ratings


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