Huntsville, Ala.'s electric revenue bonds are secured by a pledge of net revenues of the Huntsville Electric System. The rating reflects: A business profile of 2, Strong and stable financial performance with very high debt service coverage (DSC) levels, A strong regional economy, and A manageable capital improvement program (CIP) with no plans for additional debt in the intermediate term. Offsetting these strengths are Huntsville's all-requirements relationship with a sole supplier--Tennessee Valley Authority (TVA), which continues to address its high debt burden--and uncertainty relating to liability of the utility, if any, for stranded costs. The business profile rating of 2 reflects the city's proactive and experienced management team, sound operations, and strong competitive position--the latter being a result of the
