NEW YORK--(Business Wire)--
Fitch Ratings assigns an 'F1+' rating to the Municipal Gas Authority of
Georgia's (the authority) expected issuance of $175 million of gas revenue
portfolio III notes (gas portfolio III), series G, and affirms the $461 million
outstanding bonds at 'A+' and 'F1+'. The Rating Outlook is Stable.
The bonds are direct and general obligations of the authority and will refinance
a portion of its indebtedness (series C,D,E) incurred for the long-term supply
projects including providing funds to the Public Gas Partners, Inc. (PGP), a
joint-action consisting of six members including the authority. The notes will
be split into two tranches with $90 million due in six and 12 months.
The short-term 'F1+' rating reflects the market access of the authority,
available liquidity sources, and structure in which the $175 million notes will
to be split into six month maturities with no more than $90 million due every
six months. Liquidity sources, consisting of the authority's cash reserves of
$40 million and available lines of credit (to be maintained above $65 million),
are sized to be sufficient to retire one tranche of the notes maturities should
market disruptions prevent debt renewal for a period of less than six months.
The long-term 'A+' rating of the authority reflects the following credit
strengths and concerns:
Credit Strengths:
--The authority's diverse long-term gas supply portfolio, which includes both
prepaid supplies and natural gas reserves that have historically provided
discounts to members in different natural gas price environments;
--An experienced management team that has delivered consistent gas services for
over 20 years to its members.
--Overall credit quality of the 76 member systems, the majority (82%) of which
are located within the State of Georgia, and whose court-validated obligations
are backed by the full faith and credit of their respective cities.
Credit Concerns:
--Concentration of retail member sales in industrial loads (58% of throughput)
and slowing gas sales due to the economic recession;
--Increased financial pressure on member systems, resulting from higher
delinquency rates by retail customers of those members, which is mitigated by
the authority's strengthening of its risk management practices;
The authority is one of the largest natural gas joint action agency and manages
wholesale gas supply for its 76 all-requirements members and nine
partial-requirement partners. All members are local gas distribution systems
owned and operated by their respective cities.
For more information see the report dated July 17, 2009.
Additional information is available at www.fitchratings.com.
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 Ratings, New York
Drake Richey, +1-212-908-0325
Karl Pfeil, +1-212-908-0516
or
Cindy Stoller, +1-212-908-0526 (Media Relations)
cindy.stoller@fitchratings.com
Copyright Business Wire 2009
