Fitch Affirms PPL & PPL Energy Supply Ratings; Outlook to Stable.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 -- 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. has affirmed the outstanding ratings of PPL PPL - Polymorphic Programming Language. An interactive, extensible language, based on APL, from Harvard University.
["Some Features of PPL - A Polymorphic Programming Language", T.A. Standish, SIGPLAN Notices 4(8) (Aug 1969)]. Corp. (PPL), its wholly owned financing subsidiary PPL Capital Funding, Inc. and PPL Energy Supply, LLC (Logical Link Control) See "LANs" under data link protocol.
LLC - Logical Link Control as shown below. In addition, Fitch has assigned an 'F2' rating to the reestablished commercial paper program of PPL Energy Supply, LLC. The Rating Outlook for each of these entities has been revised to Stable from Negative by Fitch.
The consolidated ratings of PPL reflect the cash flow and earnings of its core subsidiaries, PPL Electric Utilities Corp. and PPL Energy Supply, while the ratings of PPL Capital Funding are based on an unconditional guarantee from PPL. Consolidated operations benefit from the predictable revenue stream from a full requirements contract A written agreement whereby a buyer assents to purchase for a sufficient consideration (the inducement to enter into an agreement) all the merchandise of a designated type that he or she might require for use in his or her own established business. between PPL Energy Supply and PPL Electric Utilities that extends through 2009, reasonable leverage (excluding non-recourse and securitization debt), and moderate capital requirements Capital requirements
Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . Importantly, about 95% of gross margins in 2004 and an average of greater than 75% over the following four years are derived from committed energy sales. The high percentage of committed energy sales over the next five years, the completion of the company's construction program, achieved and proposed asset sales, and the retirement of $657 million of lease debt earlier this year account for the Outlook revision to Stable from Negative.
The ratings of PPL Energy Supply reflect the significant revenue derived from long- and intermediate-term power supply contacts, the low production costs and competitive advantage of its largely coal and nuclear based generation fleet, a moderate level of recourse debt, and healthy financial measures. In calculating the leverage of PPL Energy Supply and PPL, Fitch excludes the non-recourse debt Non-Recourse Debt
A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults.
These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue of WPD WPD WordPerfect Document (file extension)
WPD Western Power Distribution (UK)
WPD Western Police District (local police authority in Manila, Philippines) , an electric distribution company in the UK, and other international subsidiaries in Latin America. The ratings also incorporate management's plan to refinance all or some of the approximately $900 million of affiliate PPL Capital Funding debt maturities over the next four years at PPL Energy Supply (in addition to $300 million pre-financed in 2004). Even with the additional debt, financial measures continue to support the existing rating. The incremental debt is partly offset by the retirement of approximately $660 million of synthetic lease Synthetic Lease
An operating lease that is structured in a way so that it is not recorded as a liability on the balance sheet. Instead, it is considered to be an expense on the income statement. debt earlier this year in large part with proceeds from the remarketing of PPL Capital Funding's $575 million of mandatorily convertible preferred securities.
During the course of 2004, several developments have positively affected the ratings of PPL and PPL Energy Supply. In June 2004, PPL Generation agreed to sell the 450 MW Sundance power plant to Arizona Public Service Arizona Public Service Company is the largest electric utility in Arizona and the principal subsidiary of publicly-traded S&P 500 member Pinnacle West Capital Corporation (NYSE: PNW), which in turn had been formerly named AZP Group for $190 million ($422 per kw). The sale is subject to regulatory approval and is expected to close in the first quarter of 2005. If completed, the sale will reduce merchant exposure and provide funds for additional debt reduction. The plant, which was completed in July 2002, is a simple cycle gas-fired combustion turbine that operates primarily in peak periods.
Also in June, PPL Energy Supply terminated a $660 million synthetic lease. The transaction included the purchase of the Sundance and University Park generation assets from a consolidated Trust, with the proceeds used to pay off the Trust's related financing. In May 2004, PPL Generation placed the 600 MW Lower Mt. Bethel gas-fired plant in eastern Pennsylvania in commercial operation, essentially completing its discretionary construction program. In March 2004, PPL Global completed the sale of its minority interest in shares of CGE CGE Computable General Equilibrium
CGE Conference des Grandes Ecoles (French)
CGE Carrier Grade Edition (COTS Linux platform)
CGE Classic Gaming Expo (game) , an electric distribution company in Chile, for $123 million. In April, PPL Energy Supply completed a turbine replacement at the Susquehanna nuclear plant that increased nuclear capacity by 45 MW.
The following ratings have been affirmed by Fitch:
Indicative senior unsecured debt 'BBB';
PPL Capital Funding, Inc.
Senior unsecured debt 'BBB';
PPL Energy Supply, LLC
Senior unsecured debt 'BBB+'.