PALM DESERT, Calif.—It's good to have friends in the right places, and when it comes to financial markets, electric cooperatives get the seal of approval, the head of the National Rural Utilities Cooperative Finance Corporation (CFC) said.
"How are co-ops viewed globally? They like us. We're in a very good position as cooperatives," said Sheldon C. Petersen, CEO of CFC. "We are viewed to be a very, very stable investment on the part of investors."
Speaking Jan. 9 to more than 350 co-op leaders at NRECA's CEO Close-Up, Petersen said Wall Street likes electric co-ops' not-for-profit business model.
"They think we're conservative and can respond well to changes in the industry," he said. "We don't have a lot of motivation to maximize rate of return by doing some risky things."
With low interest rates in recent years, many corporations have added debt to their balance sheets and some have taken equity out, but not electric co-ops. "Equity levels within our network have gradually moved up every year since 2007," Petersen noted.
CFC's credit ratings remained unchanged in 2017, from a mid 'A' to a high single 'A,' depending on the agency, Petersen reported.
"In addition, of all the credit ratings individual cooperatives receive, 94 percent are 'A-' or higher," he said. "Utilities remain a very, very good place for investors to put money, and in that arena electric co-ops come out on top."