East Kentucky Power Cooperative announced Tuesday that it has modified an existing loan to take advantage of lower interest rates. The electric utility's new five-year, $450 million credit line extends the length by two years and doesn't change the amount, according to a news release.
The modified unsecured loan's interest rate is substantially better, the cooperative said, and it will save more than $5 million annually. The purpose of the credit line is to provide short-term financing for capital projects.
The utility attributed the better rate to both a more favorable lending environment and improved performance. The cooperative had a net margin of $32.8 million in 2010. Net margin is a measure of profit, although as a cooperative, East Kentucky Power doesn't view earnings as a for-profit company would. It has a net margin of $39.7 million through the first half of 2011.