KBRA Releases Rating Report for New York Power Authority General Resolution Revenue Bonds
11 Sep 2023 | New York
On August 31, 2023 KBRA assigned a long-term rating of AA to the New York Power Authority's General Resolution Revenue Bonds. The Outlook is Stable. The rating recognizes the established performance of the New York Power Authority’s (“NYPA’s” or “the Authority’s”) low-cost, largely renewable generation mix and growing transmission operations; strong competitive position; independent rate setting ability; and the manageable operating risk associated with its ownership of two large hydropower assets. The rating also reflects the Authority’s solid historical and pro-forma financial performance, characterized by ample liquidity, substantial coverage of debt service and fixed costs, and manageable leverage in advance of a substantial 2023-2026 capital plan. Management’s actions to improve the balance sheet and adhere to debt policies that reduce leverage further inform the rating.
Counterbalancing the aforementioned strengths are NYPA’s highly complex and capital-intensive operating environment; its reliance on variable hydroelectric generation for a significant portion of net income; the potential for utility and non-utility mandates imposed by New York State to create operating, capital or financial obligations to negatively impact the Authority’s financial profile; and the permissive security provisions of the General Resolution.
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