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S&P, Fitch revise Basin Electric Power's outlook to stable

S&P Global Ratings on April 25 revised its outlook for Basin Electric Power Cooperative to stable from negative, and affirmed its issuer credit rating at A.

"The outlook revision reflects Basin's demonstrated capacity to produce what we consider strong debt service coverage despite ongoing significant financial losses at Dakota Gasification Co. Inc., an affiliate company of Basin's electric utility," S&P Global Ratings wrote in a report. Dakota Gasification continued to record losses despite cost cutting efforts and diversification of its product offerings, reflecting weak market prices for synthetic gas and agricultural commodities.

S&P affirmed the A ratings on Basin Electric Power's $500 million of series 2017A first mortgage obligation bonds, as well as its $925 million 2015 series C first mortgage obligation bonds.

The rating agency also assigned an A rating to Basin Electric Power's proposed $150 million of Campbell County solid waste facilities revenue bonds, series 2019A.

In a similar move, Fitch Ratings on April 25 changed its outlook for Basin Electric Power to stable from negative, and affirmed the cooperative's issuer default rating at A, outstanding long-term obligations at A, and short-term ratings at F1.

"The outlook revision to stable reflects improvement and stabilization in Basin's consolidated financial performance despite on-going losses recorded at the subsidiary level," the rating agency noted. "Fitch expects net leverage to decline further over the next five years, as Basin has largely completed its capital intensive construction cycle and has only minimal debt issuance plans."

Fitch also assigned an A rating to the proposed $150 million of Campbell County, Wyo. solid waste facilities revenue bonds, series 2019A.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.