Basically Powerco has had to borrow money to repay the maturing bonds for next year. Deeper in the article we learn that there is $320 million more of bonds due to mature across the next 7 years which Powerco does not seem to have the financing for.
The article also points out that Powerco has a rating of BBB, which is the most minimal of all of the acceptable ratings.
We at the Power Panda feel that BBB is too a high a rating for Powerco's service. Their network is old, and has daily outages. They also are a for profit lines company which means in their area you get no electricity rebates.
But it is interesting that Standard and Poors do not think that our second largest lines company is a secure investment. They are a lines company, there is constant demand for the services, a captive market, an ability to charge to cover costs, and no real liabilities. That really should be considered a good investment if properly managed and maintained.
<disclosure, we own no Powerco Bonds>
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