Fitch Rates Monongahela Power's $150MM 5.70% FMBs 'BBB+'; Outlook Negative.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 has assigned a 'BBB+' rating to Monongahela Power Company's (Mon Power) $150 million issuance of 5.70% first mortgage bonds (FMBs) that will mature on March 15, 2017. Mon Power intends to use the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the sale of the bonds, plus available cash on hand, to fund the repayment at maturity of the $300 million aggregate principal amount of 5.0% first mortgage bonds due Oct. 1, 2006. Fitch currently has an 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 'BBB-' on Mon Power, and the Rating Outlook is Negative. Fitch revised the Rating Outlook for Monongahela Power Co. to Negative from Stable on Sept. 11, 2006, following the company's announcement on Sept. 8 of an increase in the estimate of costs of constructing scrubbers at its Fort Martin plant from $338 million to a range of $500 million to $550 million. The ratio of debt to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of 4.6 times (x) for the 12 months ended June 30, 2006 is weak for the existing ratings category. The current ratings incorporate Fitch's expectation of improvement in credit ratios as a result of a balanced outcome in the pending $100 million base rate request at the West Virginia Public Service Commission (WVPSC). Fitch expects the company to file a request with the WVPSC for the recovery of the estimated $162 million - $212 million of incremental scrubber costs by financing these expenses through additional securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. debt. Inadequate or delayed rate relief for the recovery of the additional scrubber and other costs and lack of improvement in credit metrics would put downward pressure on ratings. For additional information refer to the press release dated Sept. 11, 2006 and the credit analysis dated July 19, 2006, available on the 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. web site at www.fitchratings.com. Mon Power is a vertically integrated electric utility subsidiary of Allegheny Energy, Inc. that serves West Virginia customers under the trade name, Allegheny Power. Mon Power owns interests in mainly coal-fired generating capacity totaling 2,136 MW and serves approximately 374,000 electric customers. 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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