For More Information Contact:

Lance Robertson
541-984-4716

EWEB maintains high bond ratings

The Eugene Water & Electric Board has maintained its high bond ratings following a review of the utility's financial condition by the nation's top three bond-rating agencies.

The high financial marks were welcome news for the Eugene public utility following recent rate increases, budget cuts and short-term borrowing to recover from the impacts of the 2001 drought and energy crisis. No other retail utility in the Northwest has a higher bond rating than EWEB.

EWEB maintained its existing A+ and A1 rating from the Moody's and Fitch agencies and was downgraded only slightly, to AA- from AA, by Standard & Poors. Each agency has its own rating system, but EWEB's ratings are among the highest given to municipal utilities.

Even with the slight downgrade by S&P (AA is its highest ranking for municipal utilities), the agency changed its outlook on EWEB to "stable" from "negative." EWEB and the federal Bonneville Power Administration are the only Northwest utilities to retain at least a AA- rating.

"In this time of industry turmoil, EWEB is the only retail utility in the region to retain AA/A1 standing in the credit markets," said EWEB Treasurer and chief financial officer Jim Origliosso. "This vote of confidence by the rating agencies validates actions taken by the Board to restore financial health and stability while having the least amount of impact on customers."

Overall, the bond-rating agencies said the high ratings reflected EWEB's sound strategy to recover from the 2001 energy crisis by paying off about $30 million in short-term debt and rebuilding cash reserves. In March, EWEB Commissioners approved the plan, which includes budget cuts and a temporary surcharge.

"The utility has taken strong steps to repay the borrowing quickly and reduce future financial uncertainty," S&P said.

In addition to being a sign of confidence by Wall Street, good bond ratings benefit EWEB customers by keeping interest rates low on bonds that are sold to finance various projects. "These high ratings will result in considerable savings in the form of lower borrowing costs over the coming years," Origliosso said.