Correction: Fitch Rates TXU Energy's $1.25B Sr Notes 'BBB'; Outlook Stable.

Business Editors

NEW YORK--(BUSINESS WIRE)--March 7, 2003

(This is an amended version of a press release issued yesterday, containing revised information on the $1.25 billion, not $500 million, 'BBB'-rated senior notes.)

Fitch Ratings assigns a 'BBB' rating to TXU Energy Company LLC's (TXU Energy) $1.25 billion senior notes. Affirmed are TXU Energy's 'BBB' rating on outstanding senior unsecured bonds (including pollution control bonds issued through the Trinity River Authority, Brazos River Authority, and Sabine River Authority), and the short-term rating of 'F3'. Also affirmed are TXU Corp's (TXU) ratings of 'BBB-', 'BB+', for its senior notes, and preference stock, respectively and its short-term rating of 'F3'. The Rating Outlook on all ratings is Stable. Proceeds will be used to paydown inter-company loans and for general corporate purposes. The notes are expected to price this week with Lehman Brothers, and Salomon Smith Barney as joint lead managers.

The rating reflects TXU Energy's capital structure of approximately 2.83 times (x) net debt-to-EBITDA, sufficient liquidity to meet refinancing needs, solid cash flow interest coverage of 6.7x, and a currently low retail churn ratio in Texas. However, the rating also takes into account Fitch's view that currently high margins earned by retail power suppliers in Texas are likely to moderate over time if price competition becomes more prevalent in that market, though this is not an immediate concern. An additional concern is the current over-supply of generation in Texas that has placed pressure on the energy spot market and has limited the profitability of TXU Energy's favorable generation portfolio.

TXU's ratings and Stable Outlook takes into account the existence of sufficient liquidity to meet expected company wide refinancing and potential collateral requirements, as well as a recent favorable settlement, with parties who had appealed a Public Utilities Commission of Texas order approving TXU regulatory settlement plan, that should pave the way for Oncor Electric Delivery Co. to issue securitization bonds (totaling $1.3 billion). The Stable Outlook for TXU also factors in Fitch's view that TXU will not have a material liability for TXU Europe obligations (the obligations of TXU Europe are currently rated 'D').

Factors that could result in higher future ratings for TXU and its affiliates are: the TXU group's ability to reduce consolidated debt and leverage measures during 2003-2004; sustained improvement in operating performance of TXU Gas and TXU Australia; and stable operating performance and margins continuing at TXU Energy despite the constrained credit and business environment. Ratings could be lowered from the current levels in the event of substantial, unanticipated erosion in TXU Energy's margins, possibly as a result of more aggressive price competition evolving in the retail supply market, or an unexpected liability for material obligations of TXU Europe.