Fitch Revises Rating Outlook for Heartland Energy to Positive

by Paul Ciampoli
APPA News Director
November 23, 2022

Fitch Ratings has affirmed ratings of Heartland Energy at ‘A-‘ and revised the rating outlook to Positive from Stable.

Specifically, Fitch affirmed the following ratings at ‘A-‘: $6.6 million taxable electric system revenue bonds, series 2018 and Long-Term Issuer Default Rating.

Fitch noted its rating on Heartland’s implied second lien revenue obligations has been withdrawn as no debt is outstanding under the lien and the rating is no longer considered to be relevant to the agency’s coverage.

Heartland Energy’s ‘A-‘ ratings “reflect the strong wholesale take-and-pay power sales contracts (PSCs) with purchasers exhibiting midrange purchaser credit quality, as well as an independent ability to adjust rates. The utility’s low operating risk is driven by a low operating cost burden derived from a portfolio of high availability and low-cost generation,” Fitch said.

The revised Positive Outlook reflects the increased stability in Heartland’s operating profile, as well as Fitch’s view that lower, sustained financial leverage could support positive rating action.

Heartland Energy provides wholesale power to public power communities across South Dakota, Minnesota, Iowa and Nebraska.

Based in Madison, SD, Heartland Energy also provides a suite of customer service programs including economic development, energy efficiency, cybersecurity and more.