Correction: Fitch Rates Leesburg Electric System Rev Bonds 'A-'.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 27, 2004

(This is an amended version of press release issued yesterday, containing revised information in the third paragraph.)

Fitch assigns an 'A-' rating to the City of Leesburg, (Florida) $17 million electric system revenue bonds, series 2004. The Rating Outlook is Stable. Bond proceeds will be used for capital improvements to the electric system. The bonds are scheduled to be priced the week of June 21, 2004 with Citigroup as senior manager. Simultaneous with the electric system financing, the City plans to issue $24 million of utility system bonds that will be secured by net revenues of the water, wastewater and gas utility systems.

The rating takes into account Leesburg's electric system's power supply resources with the Florida Municipal Power Agency's (FMPA) All-Requirement Project (rated 'A+', see Fitch report dated May 20, 2003) providing a significant portion of the electric's system energy needs (85% in 2003) and gives the electric system a diverse (coal and gas) and stable energy supply. The remainder of the electric system's power supply program is met through its ownership interests in the Crystal River Nuclear facility and FMPA's St. Lucie Nuclear Project (rated 'A-'). The electric system's growing energy needs will be met by the All-Requirement Project.

The electric system's rating also reflects a stable and diverse customer base where 44% of all revenues are derived from residential sales and the 10 largest customers represent only 7% of total revenues. In addition, the system's financial profile is solid including 2003 debt service coverage of 7.3 times (x) (1.5x after adjusting for its purchase power obligations), and $16 million in available cash (nearly six months of operating expenses). After using a majority of its existing cash to retire debt and provide an intradepartmental loan to the water system, the electric system will replenish its cash reserves by adjusting rates that will increase revenues by 10% in 2005 and with small inflation rate adjustments planned thereafter. The electric system's liquidity profile is also supported by its ability to review and adjust rates on a monthly basis. The electric system expects to set rates that will generate future debt service coverage of 6x-7x (1.7x-1.8x after adjusting for purchase power obligations).

Fitch recognizes the City's efforts to bolster the electric system's financial strength through recently approved transfer policies (enacted in 2000) and sufficient cash reserve requirements, as well as through consistent management practices. These new policies and practices provide positive support for the rating.

Credit risks include electric retail rates that are slightly above average for Florida. This concern is mitigated somewhat by the lack of momentum for retail competition in Florida and lack of customer concentration. In addition, transfers to the city are limited by policy (approximately 10% of budgeted operating revenues), but represent 20% of the City's annual budget - both above regional and national averages. While the transfers have been consistent and are subordinate to debt service payments, they create upward pressure on the electric system's retail rates.

The Leesburg Electric System is a municipal retail utility system located in north central Florida. The electric system serves approximately 20,000 customers in a service area that includes the City of Leesburg, the City of Fruitland Park and surrounding unincorporated areas.