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Rating Action: Moody's assigns Aa3 to Marshfield Electric Enterprise, WI's revenue bondsGlobal Credit Research - 11 Feb 2021New York, February 11, 2021 -- Moody's Investors Service has assigned an initial Aa3 rating to Marshfield Electric Enterprise, WI's $16.8 million Electric System Revenue Bonds, Series 2021A. Post-sale the enterprise will have $36.6 million in outstanding revenue debt, $16.8 million of which is rated by Moody's.RATINGS RATIONALEThe Aa3 rating reflects the electric enterprise's very strong financial strength and liquidity, and a good willingness and ability to recover costs despite the oversight of the Public Service Commission of Wisconsin (PSC). Although the enterprise has close governance ties to the City of Marshfield (A1 negative), its customer base extends a little beyond the boundaries of the city. Area income levels are average and there is some concentration among top billed customers. While the system mostly distributes power purchased from Wisconsin Public Service Corporation (long-term issuer rating: A2 stable), it has material generation exposure from its ownership of an M-1 combustion turbine plant. Governance is a key rating driver for the credit. The enterprise is governed by a commission appointed by the city's Common Council. Base rate increases must be approved by the PSC, which has a history of supporting the enterprise's requests. The enterprise uses power cost adjustments to alleviate near-term expenditure fluctuations.RATING OUTLOOKMoody's does not usually assign outlooks to local governments with this amount of debt.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING-Diversification and strengthening of the customer base and service area economy-Upward movement of the City of Marshfield's GO ratingFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING-Deterioration of reserves or debt service coverage-Materially higher debt ratios or coverage-Weakening of the customer base or service area-Downward movement of the City of Marshfield's GO ratingLEGAL SECURITYThe electric system revenue debt is payable solely from the net revenues of the City of Marshfield's Electric Enterprise.USE OF PROCEEDSThe bond proceeds will be used to construct a new office building and garage for the electric and water utilities. The electric utility will be the owner and the City of Marshfield Water Enterprise (Aa3) will be a tenant and pay rent.PROFILEThe Marshfield Electric Enterprise is owned by the City of Marshfield and operated by a five member commission whose members are appointed by the city's governing body. The enterprise is primarily a distribution system that delivers electricity to about 13,500 customers over 125 square miles in the City of Marshfield and several surrounding communities. The system also owns and operates an M-1 natural gas / fuel oil combustion turbine peaking facilityMETHODOLOGYThe principal methodology used in this rating was US Public Power Electric Utilities with Generation Ownership Exposure Methodology published in August 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1170209. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.At least one ESG consideration was material to the credit rating action(s) announced and described above.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. 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