¬For immediate release
CONTACT:
Nina Axelson
District Energy St. Paul
Direct: 612-695-1288
Email: nina.axelson@districtenergy.com
District Energy St. Paul Receives A- Rating from Standard & Poor’s
Saint Paul, MN (October 22, 2015) – Standard & Poor’s Ratings Services (S&P) has affirmed its long-term rating of ‘A-‘/Stable to the Housing and Redevelopment Authority of the City of Saint Paul, Minn.’s District Energy bonds series 2013 A-E issued for District Energy St. Paul, Inc. and 2013 A-E issued for District Cooling St. Paul Inc.
According to S&P, the rating review reflects a series of credit strengths, including stable revenue under long-term contracts with a fairly diverse customer base, base rates that are adjusted annually to fully recover costs (including debt service) and an energy charge that can be adjusted monthly if necessary to recover changes in the cost of fuels, and well-managed assets, which are reliable and competitively priced. The A- rating is significant within the utility industry. Investment grade ratings of BBB- or above are seen as a major threshold for business stability and financial continuity.
District Energy received its first S&P rating in 2013 and this S&P rating review was part of an organizational restructuring. On October 1, 2015, District Energy St. Paul merged with District Cooling St. Paul, bringing the cooling services under the District Energy brand. By merging, the combined organization will gain increased financial strength and achieve internal efficiencies. Both sets of 2013 A-E bonds are now obligations of District Energy St. Paul, Inc.
“The S&P rating is a reflection of our organization’s commitment to efficient operations, fiscal responsibility, and sound financial practices that benefit our customers and Saint Paul,” Ken Smith, President and CEO of District Energy.
District Energy is in its 33rd year of heating service and 24th year of cooling service to the Saint Paul central business district. This fall the utility announced that it will be keeping its heating and cooling rates steady for the fifth year in a row. District Energy provides services to a diverse customer base including fortune 500 companies, the Minnesota State Capital, Saint Paul’s City Hall, the county courthouses, St. Paul College, historic institutions, entertainment complexes, residential buildings, and the 5 major hospitals.
The stable rating reflects S&P’s expectation that they will not raise or lower the rating in the two-year outlook based on District Energy’s sound financial policies, liquidity, and the general stability of the customer base and long-term contracts.
More information on S&P ratings can be found at standardandpoors.com.