Making the grade
For the Grand River Dam Authority, the good news came on consecutive days in mid-October.
On Thursday, October 6, GRDA learned that Fitch would give an “A+” rating both to GRDA’s previous bonds as well as to the upcoming $460 million issue (set for October 25). One day later, Standard & Poor’s Global Ratings followed suit and also announced it would also assign an “AA-” rating to the new issue, as well to the previous bonds. Both cases equaled upgrades for GRDA.
Of course, all of this good credit news was very well-received at GRDA, where the board, management and workforce have been striving for this very thing for more than a decade. When upgrades are received, it is also the result of many positive factors including the diversity of the power supply (GRDA has coal, gas, water and wind) and others like cash flow, risk management policies, operating performance and long term relationships with customers (most of GRDA’s municipal customer relationships are now over 60 years old). Since 2005, the ratings trend has been slowly climbing to a point where, today, the Authority has the highest credit ratings in its history.
Most importantly, this all translates into real savings for GRDA and its ratepayers. In fact, this latest bond issue is being done to refinance previous debt, similar to the way a homeowner would refinance a mortgage. That effort, coupled with good ratings, will equal millions in savings.
Throughout its 80-plus year history, bond issues have been GRDA’s chief financing tool for construction or acquisition of the assets it needs to maintain its role as an abundant, reliable electricity producer and supplier. And today, that tool is as strong and beneficial as ever.
Ultimately, it all comes back to the efforts to operate as efficiently as possible. Good news from the rating agencies shows that GRDA is on a solid path to achieving that goal.
Headquartered in Vinita, GRDA is Oklahoma’s state-owned electric utility; fully funded by revenues from electric and water sales instead of taxes. Each day, GRDA strives to be an “Oklahoma agency of excellence” by focusing on the 5 E’s: electricity, economic development, environmental stewardship, employees and efficiency.
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