Cedar Falls Utilities (CFU) will save $3 million in interest costs after completing a planned refinance of outstanding electric revenue bonds last week.
The bond sale refinances revenue debt originally issued in 2005 and 2007 when interest rates were higher. Last week Moody’s Investors Service rated the new bonds Aa2, upgrading the Electric Utility’s debt rating from Aa3. Moody’s cited the Cedar Falls Municipal Electric Utility’s sound financial operations and modest debt burden, along with favorable economic conditions in the region, as reasons for the bond rating upgrade.
“We were waiting for the call date on the Electric Utility’s older debt, and hoping interest rates would stay close to historic lows when we went to the market for this refinancing,” said CFU General Manager Jim Krieg.
Krieg noted that Aa2 is a particularly strong investment rating for a smaller utility. CFU serves just over 18,000 electric customers.
“Saving $3 million in interest over the next 11 years is a terrific outcome for our customers,” he said. “It speaks to the fact that our Trustees and our staff have managed the utility effectively during times of tremendous change in the electric industry. Because of that we have a healthy balance sheet and a strategic plan that sets our direction for the future.”
The Cedar Falls Municipal Utilities provide electric, water, natural gas and broadband services to homes and businesses in Cedar Falls, IA. The Utilities are owned by the City of Cedar Falls, operated for community benefit and governed by a citizen Board of Trustees.