Fitch Affirms Lincoln Electric System, NE's CP Program at 'F1+'

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the following city of Lincoln, NE Lincoln Electric System's (LES) ratings:

--$150 million electric system revenue commercial paper (CP) note program at 'F1+';

--$150 million electric system revenue CP bank note at 'AA'.

SECURITY

The CP notes are secured by a pledge of system net revenues, subject solely to the prior payment of LES's long-term debt. The rating on the bank note, which is a promissory note evidencing LES's obligation to the Bank of Tokyo-Mitsubishi UFJ, Ltd. (IDRs of 'A/F1') for any draws made on a $150 million revolving liquidity facility, is based on LES's long-term rating.

KEY RATING DRIVERS

SUFFICIENT LIQUIDITY AND STRONG LONG-TERM RATING: The 'F1+' rating on the CP note program reflects LES's sufficient internal liquidity sources, including a $150 million revolving credit facility, as well as its strong 'AA' long-term rating and Stable Outlook. LES's available liquidity consistently exceeds Fitch's 1.25x coverage threshold.

SOLID LONG-TERM CREDIT CHARACTERISTICS: LES's healthy service territory and considerable rate flexibility underpin its strong long-term credit rating. Stable cash flow metrics evidence LES's overall strong financial position and management, which includes extensive risk management and planning. Debt service coverage has remained nearly unchanged at an average of slightly more than 2x annually over the past five years.

RATING SENSITIVITIES

TIGHTER LIQUIDITY: While its minimum liquidity thresholds make it unlikely, any sustained compression in LES's coverage ratio below the 1.25x level could ultimately lead to negative rating action on the CP note program.

CREDIT PROFILE

LES's strong long-term credit characteristics, coupled with its available liquidity sources, support the 'F1+' rating on its $150 million CP program. The program has been an inexpensive source of interim financing of capital projects, reflecting, in part, LES's credit quality. The program currently has $54.5 million of available capacity.

Liquidity sources include a $150 million revolving liquidity facility provided by the Bank of Tokyo-Mitsubishi UFJ, Ltd., as well as the system's own cash and investments. A bank note obligates LES for the full repayment of any draws on the credit facility. LES also maintains a $50 million revolving credit agreement with Wells Fargo Bank, N.A.

Total available sources provided 2.2x coverage of the maximum borrowable amount of CP at Jan. 31, 2016. This comfortably exceeded Fitch's expected metric of 1.25x the maximum program size for the 'F1+' rating.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Rating U.S. Public Finance Short-Term Debt (pub. 17 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873508

Revenue-Supported Rating Criteria (pub. 16 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750012

U.S. Water and Sewer Revenue Bond Rating Criteria (pub. 03 Sep 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=869223

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1000498

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1000498

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160304005723/en/

Fitch Ratings
Primary Analyst
Christopher Hessenthaler
Senior Director
+1-212-908-0773
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Andrew DeStefano
Senior Director
+1-212-908-0284
or
Committee Chairperson
Kathy Masterson
Senior Director
+1-512-215-3730
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• A Proud Milestone for AISpeech! Matrix Array Microphone Named AV Awards 2026 Finalist in Two Categories
• Invitation to FLSmidth’s Capital Markets Day 2026
• 5 Best Cryptos to Watch in 2026: Apeing’s Upcoming Launch Could Shake Up the Crypto Presale List