CORE Electric Cooperative (CORE) announced that Fitch Ratings has assigned CORE a first-time Long-Term Issuer Default Rating (IDR) of “AA-“, with a Stable outlook. “AA-” is in the highest public rating tier achieved for electric distribution cooperatives rated by Fitch Ratings.
“The “AA-” IDR reflects CORE’s very strong financial profile in the context of a rapidly growing and diverse retail customer base, very strong revenue defensibility characteristics, very low but increasing operating costs, a diverse supply of energy, and a manageable capital plan,” stated Fitch Ratings in its report.
Advance innovative energy solutions
CORE CEO, Jeff Baudier, regarding the announcement, stated, “To earn such a high credit rating on our first attempt is an incredible accomplishment. It is a testament to CORE’s track record of sound financial management, and it also recognizes the strength of our plan to advance innovative energy solutions that ensure clean, reliable, and affordable power for our members.”
“Fitch’s “AA-” rating recognizes CORE’s solid financial position and disciplined approach to operations. This excellent credit rating allows CORE to secure the most competitive interest rates from lenders, benefiting members by keeping CORE’s costs, and therefore member rates, as low as possible,” said Dede Jones, CORE’s Chief Financial Officer.
Highlights of the credit report
- CORE’s five-year historical financial performance has been very strong, marked by relatively low leverage and healthy coverage levels. The cooperative’s financial performance is supported by robust growth within the service territory, which also served to minimize rate increases over the past decade.
- CORE’s operating risk profile is strong, reflecting a low but rising operating cost burden and a reasonable transition plan to a more actively managed power supply strategy. The low operating risk assessment also benefits from a very young age of power plant and manageable capital needs.
- The cooperative exhibits very strong revenue source characteristics and revenue defensibility.
- CORE’s service area demand characteristics are very strong. The cooperative’s service territory is among the fastest-growing areas in the country in a desirable location between Denver and Colorado Springs. The economic base is anchored by professional services and technology firms, retail, healthcare, and finance, and the unemployment rate trends well below the U.S. rate.
- Rate flexibility is also considered very strong, as CORE has the independent legal ability to determine rates. The cooperative’s rates are very affordable, representing just 1.1% of Douglas County’s median household income.
- CORE’s transitioning resource plan is expected to meet or exceed Colorado’s GHG reduction targets.
Commitment of CORE’s leadership
“The Board of Directors is very pleased with and proud of this credit rating,” said CORE’s Board President, Tim White.
He adds, “We share in the commitment of CORE’s leadership and staff to serving our communities as responsible stewards of their assets.”
