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S&P downgrades LCRA to negative credit risk rating
November 28, 2012, 6:00 pm by James Walker
The Lower Colorado River Authority’s rating outlook has been downgraded to negative from stable by the Standard & Poor credit ratings service.The ratings downgrade affects the LCRA and its obligated affiliate, the Lower Colorado River Authority Transmission Services Corp., Standard & Poor’s said in a statement accompanying the announcement.
"The outlook revision affects about $2.93 billion of debt and reflects the authority’s loss of some customers,” the S&P statement said.
The negative outlook also reflects the "possibility that LCRA could find it more difficult to maintain its financial margins and preserve cash at levels that had previously supported the rating,” the statement said.
Late Thursday, the LCRA released a statement that said the rating agency's action was reaction to "the uncertainty of the contract status with some of our wholesale electric customers that has unfolded over the last few months."
Several customers improperly terminated their contracts and have not been paying amounts due under the contracts and another customer provided notice of termination effective in January 2013, the LCRA statement said.
"LCRA has taken aggressive action, including litigation, to enforce the contracts. We have a high degree of confidence we will prevail and recover our costs under those contracts. LCRA continues to prudently manage its costs to ensure we maintain our financial stability during this period of uncertainty," the statement said.
P.O. Box 1000, Marble Falls, Texas 78654 - Phone: (830) 693-4367