FortisTCI Attains Public Credit Rating of 'BBB'; Outlook Stable

CUSTOMER CARE 649-946-4313
Sep 17, 2014
Speaking on the assessment Mr. Powell said, “This is a milestone achievement for us. For any Caribbean company to achieve such a rating, especially on its initial application, is a significant accomplishment.” Further discussing how this will impact the company, the CEO said, “This investment grade rating will allow FortisTCI to gain access to regional and international capital markets and attain long-term favourable sources of funding. The electrical utility is one of the most capital intensive industries in the world, and requires significant and continuous financial injection.”
 
 
​Standard & Poor’s issued a press release yesterday, highlighting the long-term corporate credit rating of ‘BBB’ attained by the electric utility provider FortisTCI. It stated, “The rating reflects what we view as the company’s “satisfactory” business risk profile and “significant” financial risk profile.” It read, “In addition, we expect there will be no material adverse changes to the operating license, which expires in 2036. Despite the lack of full transparency and the risk of political intervention associated with the current regulatory structure, we do not expect any adverse regulatory rulings or government interference.”
 
Speaking to the risk profile of FortisTCI, Standard & Poor’s said, “We believe the company has a significant financial risk profile. Its adjusted funds from operations (AFFO)-to-debt ratio is 16.15%. The base case scenario forecast AFFO-to-debt during our two-year outlook horizon is 17%-21%. We attribute this improvement to an expected USD$10 million equity inject from parent Fortis Inc., a surge in government infrastructure spending and commercial capital expenditures (resulting in additional demand for electricity), and improved margins from the use of more fuel efficient diesel power generators.” The press release adds, “An upgrade would require a meaningful improvement to the transparency, consistency and tariff structure of the regulatory regime. Sustained improvement to FTCI’s financial risk profile, specifically AFFO-to-debt of 23%-25% on a sustained basis, could also lead to an upgrade.”​
 
​The official application was filed in July, which was followed by a rigorous diagnostic and assessment process. This is an historic achievement for the Turks and Caicos Islands’ private sector and positions FortisTCI as one of the leading businesses in the region.
 

Notes to Editors:

 

1) FortisTCI Limited (FTCI) became a wholly owned subsidiary of Fortis Inc. located in Newfoundland, Canada in August 2006. Turks and Caicos Utility Limited (TCU), which is the sole provider of electricity on the Islands of Grand Turk and Salt Cay, was acquired by FTCI in August 2012. FTCI is the sole provider of electricity in Providenciales, North Caicos, Middle Caicos, East Caicos and adjacent Cays, and South Caicos. Together the two companies serve approximately 13,000 electricity customers in the Turks & Caicos Islands. The Utilities have an aggregate diesel-fired generating capacity of approximately 75 megawatts. Additional information on FortisTCI can be accessed at www.fortistci.com.

 

2) Fortis is the largest investor-owned distribution utility in Canada, with total assets approaching $25 billion and fiscal 2013 revenue exceeding $4 billion. Its regulated utilities account for approximately 93% of total assets and serve more than 3 million customers across Canada and in the United States and the Caribbean. Fortis owns non-regulated hydroelectric generation assets in Canada, Belize and Upstate New York. The Corporation's non-utility investment is comprised of hotels and commercial real estate in Canada. For more information, visit www.fortisinc.com or www.sedar.com.

 

CONTACT:
Allan Robinson
VP, Customer & Corporate Services
FortisTCI Ltd
Tel: 649-946-4313 Ext. 2507
Email: arobinson@fortistci.com