AMP takes great pride in its relationship with the financial community. The importance of this relationship grows as AMP continues to enter the market to finance new capital projects. Policies have been established by the AMP Board of Trustees to ensure AMP remains a strong and viable organization throughout this period of growth.
On September 24, 2007, AMP entered into a Credit Agreement with a syndicate of commercial banks led by J.P. Morgan Chase Bank, National Association. The total available credit is currently $750 Million. Other members of the syndicate include: Key Bank, NA; U.S. Bank, NA; Wells Fargo Bank, NA; Bank of Montreal; Bank of American, NA; Barclays Bank, PLC; Royal Bank of Canada; Sun Trust Bank; and The Huntington National Bank.
Tax Exempt Commercial Paper
On January 22, 2008 AMP initiated a tax-exempt commercial paper (“CP”) program for interim funding of AMP capital projects. The amount of the CP program is $450 million and it is secured by a letter of credit drawn under its Line of Credit (defined above).
AMP seeks to obtain and maintain the highest credit ratings for all projects. AMP has traditionally received ratings from three ratings agencies (Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s).
In addition to an annual audit, AMP has a quarterly financial review performed by its independent accounting firm. In addition, AMP makes available periodic status reports on projects under construction.
Member Financial Soundness
AMP finance staff monitors the financial soundness and creditworthiness of all AMP Members. Upon release of each AMP Member’s annual financial audit, using a Credit Scoring Policy passed through the AMP Board of Trustees, AMP staff conducts an internal credit scoring review.
Credit Scores are presented to the AMP Board of Trustees monthly. Should a Member’s score fall below acceptable levels, AMP’s finance staff works with that Member to bring their score into the range acceptable by the Credit Scoring Policy.
Financial Criteria for Membership
Due to the benefits provided through AMP membership, AMP is approached from time to time by subdivisions of states who are seeking to become a member. In order to ascertain the potential financial risks with adding a new Member, the AMP Board of Trustees has passed a financial criteria policy with specific guidelines that candidates seeking membership must meet. AMP finance staff conducts a financial review based on the metrics within that policy, and recommendations for membership are provided to the AMP Board of Trustees.
AMP maintains compliance with all requirements for continuing disclosure as required to meet Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Act of 1934.