Like most of the world, Public Service Company of New Mexico (PNM) will have to accept being “average,” according to ratings released Thursday by Standard & Poor’s Ratings Services that provide a triple-B-minus (BBB-) rating with a positive outlook for a company refinancing.

the Albuquerque-based combination utility plans to issue $300 million of unsecured notes to payoff $268 million of aggregate 7.10% debt outstanding.

With deregulation repealed in the state, retail rates lowered earlier in the year, and what S&P called “ample capacity” to satisfy the expected retail growth, PNM has a “solid, average business profile (5 on a 1-to-10 scale with 10 being worst),” the rating agency said.

S&P said the “average” rating and PNM’s business profile are characterized by the utility’s “dominant position” as the state’s major power and natural gas supplier, a relatively high rate of electricity demand growth, and what the rating agency describes as “management’s conservative strategy” for marketing surplus electricity in the Southwest regional wholesale market.

In offering a “positive” outlook for PNM, S&P said it expects the company’s management to reduce operating costs and debt to improve the utility’s financial ratios. The current triple-B rating usually requires cash-interest coverage of 3.5x, S&P said, and debt at around 50%. Both of these ratios are targets PNM thinks it will realize by the end of next year. Last year, the company’s comparable ratios were 3x and 58%, S&P said.

S&P also characterized PNM’s business position as one of revenue streams that are “predictable,” and its regulatory relationship with the state’s regulators as “a strong working relationship.”

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