CPS Energy sold nearly $51 million of its electric and gas systems revenue refunding bonds in New York this week. Proceeds from the sale of the bonds will be used to refund bonds previously issued in 2002, resulting in savings of almost $7.7 million. 

“Our tax-exempt bonds were very well received in the market due mostly to our high credit ratings, reflecting this utility’s strong credit strength,” commented Senior Director of Finance Linda Dzierzanowski. “The demand for the bonds exceeded the supply by about 7 times.  As a result, CPS Energy was able to reduce the interest rate, which will result in debt service saving for our customers.” 

The bonds received strong ratings by each of the three main credit ratings agencies. The ratings are as follows:

• Fitch Ratings Inc.: “AA+”
• Moody’s Investor Service:  “Aa1”
• Standard & Poor’s:  “AA”        

"The rating reflects what we view as several strengths of San Antonio's electric and gas utility, including a strong, growing economy, very competitive electricity rates, diverse-fuel generating capacity, strong financial metrics, and good management," said Standard & Poor's credit analyst Judith Waite.  “We believe that maintaining the utility's strong financial risk profile, however, will depend on rate increases as needed and the ability to limit operating costs to keep rates in line with other Texas utilities.”

S&P also cited the following factors in its ratings:

• The completion and operation of Spruce 2, a 775-megawatt (MW) coal-fired plant, which provides fairly low-cost base load electricity; and four quick-start gas-fired peaking units, all equipped to minimize particulate, sulfur, and nitrogen oxide emissions.
• The Save for Tomorrow Energy Plan (STEP), which will help CPS Energy achieve its goal of reducing the growth in demand by 771 MW by 2020.

CPS Energy is rated in the highest rating category of any combined electric and gas utility in the nation. For additional financial information, visit cpsenergy.com.