Amended- Fitch Affirms IPALCO Enterprises and Indianapolis Power & Light Company at 'BBB-'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- (This is an amendment to the release that went earlier today; it adds a class of securities to those listed for IPL (Initial Program Load) Same as boot. 1. IPL - Information Processing Language. 2. IPL - Internet Public Library. 3. IPL - Initial Program Load. 4. IPL - Initial Program Loader. below). Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) of IPALCO IPALCO Indianapolis Power and Light Company Enterprise, Inc. (IPALCO) and its subsidiary Indianapolis Power & Light Company (IPL) at 'BBB-'. The Outlook for IPALCO and IPL is revised from Positive to Stable. IPALCO is a holding company with no material tangible assets except IPL stock, and it relies solely on distributions from IPL to service its debt and make upstream dividends to its parent, AES. The ratings for IPALCO are based on the credit profile of its utility subsidiary, IPL, restrictions on dividend distributions from IPL to IPALCO, and the limited financial flexibility of its parent AES Corporation AES Corporation AES (NYSE) is a Fortune 1000 company that generates and distributes electrical power. It was founded on January 28, 1981 by Roger Sant from the US Federal Energy Administration and Dennis Bakke from the Office of Management and Budget. (AES, Fitch IDR 'B+') to provide equity support. The revision of IPALCO's Rating Outlook to Stable from Positive primarily reflects Fitch's concern over the weak economy and lower wholesale power pricing environment that are likely to reduce IPL's margins and result in lower dividend distributions to IPALCO. Fitch also notes dividend restrictions that limit up-streamed dividends and inter-company borrowings from subsidiary IPL and the limited flexibility of parent AES to provide equity support, if needed. Consolidated measures of debt to funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) are expected to increase modestly over the next three years. Fitch anticipates FFO interest coverage based upon consolidated financials for 2009 and 2010 will be in the range of 3.0 times (x)-3.1x. The FFO adjusted leverage will be 4.5x-4.7x. Favorably, IPALCO does not have any material debt maturities in 2009-2010, but will have to refinance $375 million of debt due in 2011. IPL's ratings consider the utility's strong stand-alone credit profile as well as the debt leverage of its direct parent IPALCO and the overall weak financial position and limited financial flexibility of its indirect parent AES Corp. The Outlook revision to Stable from Positive reflects the expected effect of a weak economy on IPL's retail sales and wholesale margins. The Stable Outlook reflects a supportive regulatory environment including pass-through mechanisms to recover fuel costs (adjusted quarterly) and investments in environmental assets (adjusted semi-annually). IPL's annual capital expenditures roughly equal depreciation expense, and the utility has a stable customer base and does not rely on sales to manufacturing sector. Fitch anticipates that IPL's FFO interest coverage ratio for 2009 and 2010 will be in the range of 5.4x-5.7x and FFO adjusted leverage will be in the range of 2.6x-2.8x for the same period. Fitch also anticipates that IPL's debt will be relatively constant over the period 2009-2013, increasing by only $100 million to finance its 2011 capital needs. IPL is a vertically integrated utility operating in Indianapolis, Indiana serving approximately 470,000 consumers. It is a subsidiary of IPALCO Enterprises, which is in turn a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of The AES Corporation. Fitch affirms following ratings, all with Stable Outlook: IPALCO --IDR 'BBB-'; --Senior Secured 'BBB-'. IPL --IDR 'BBB-' --Senior Secured 'BBB+'; --Secured Pollution Control Revenue Bonds 'BBB+'; --Unsecured Pollution Control Revenue Bonds 'BBB'; --Preferred Stock 'BBB-'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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