...Kentucky Municipal Energy Agency's (KYMEA) 'A' rating on the bonds and Issuer Default Rating (IDR) reflects its very strong revenue defensibility, supported by long-term take-and-pay power sales contracts (PSCs) with its all-requirements members, as well as rate- setting requirements pursuant to those contracts that provide for an unlimited reallocation of costs in the unlikely event of a member default. The ratings also consider KYMEA's evolving profile, including the expected loss of its largest member in 2029, its transitioning business strategy, as well as the credit quality of the agency's broad pool of purchasers. KYMEA's strong operating risk profile, evidenced by its low operating cost burden and diverse and flexible and power supply mix, along with its strong financial profile, are important considerations for the rating. KYMEA's leverage ratio, measured as net adjusted debt to adjusted funds available for debt service (FADS), approximated 6.0x prior to 2024 but increased to 9.7x...
