Fitch Rates AE Supply's New Credit Facilities 'BB-'; Outlook Now Stable.Business Editors NEW YORK--(BUSINESS WIRE)--March 11, 2004 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 assigned new ratings to Allegheny Energy Allegheny Energy (NYSE: AYE) is a traditional public utility based in the Pittsburgh suburb of Greensburg. It services communities in Western Pennsylvania, Western Maryland, Northern West Virginia, Northwest Virginia. Supply Company LLC's (AE Supply) bank refinancing Refinancing An extension and/or increase in amount of existing debt. facilities, as follows: 'BB-' to the $750 million senior secured facility, consisting of pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. shares of the $650 million Secured Term Loan B (B Loan) and the $100 million new Springdale Facility (New Springdale Facility); and 'BB-' to the $500 million Secured Term Loan C (C Loan). Both B and C Loans share in a first priority lien on substantially all the assets of AE Supply (AE Supply Assets), while the New Springdale Facility has a first lien on the Springdale asset only. Fitch has also upgraded the ratings of Allegheny Energy Supply Statutory Trust 2001 A-Notes (A-Notes) to 'BB-' from 'B+' to reflect the change of security to a first priority lien security from the existing second lien A Second lien financing is a form of financing secured on a second ranking basis by (more or less) the same security, which secures the first ranking financing. The first lien lenders and the second lien lenders agree that, in the event of a security enforcement or bankruptcy, the on AE Supply Assets. AE Supply's senior unsecured notes are affirmed at 'B-'. The B Loan has a seven-year final maturity while the C Loan's final maturity of 7.25 years, and both have minimal scheduled amortization in the interim. Also, the new debt enables the company to reduce interest expense. As a result of the material reduction of liquidity risk at AE Supply, AE Supply's ratings are removed from Rating Watch Negative and assigned a Stable Rating Outlook. At the same time, Allegheny Energy, Inc. (AYE), parent of AE Supply, obtained a $200 million unsecured revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and $100 million unsecured term loan, with three-year final maturities. These facilities replace the prior $330 million bank credit facility maturing in 2005. As a consequence of all of the developments noted above, and the expectation that AYE will file audited annual financial statements for the year ended Dec. 31, 2003 (Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. ) this week, concluding a long process to resolve financial accounting issues, Fitch expects to review the ratings of AYE and other AYE subsidiaries within the next few days. The following existing ratings are affirmed and Outlook changed to Stable from Rating Watch Negative: Allegheny Energy Supply Company LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control -- Senior unsecured notes affirmed at 'B-'. Allegheny Generating Company -- Senior unsecured debentures affirmed at 'B-'. The following ratings are affirmed: Allegheny Energy Supply Company LLC -- Pollution control bonds (MBIA-Insured) 'AAA'. Allegheny Energy Inc. is a registered utility holding company whose principal regulated utility subsidiaries are Monongahela Power, Potomac Edison and West Penn Power. AE Supply, Allegheny Energy's principal non-utility subsidiary, develops, acquires, owns and operates generating plants and markets electricity and other energy products. |
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