Fitch Rates TXU's Feline PRIDES 'BBB'.Business Editors
NEW YORK--(BUSINESS WIRE)--June 5, 2002
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. assigns a 'BBB' rating to TXU TXU Texas Utilities (Electric and Gas Company)
TXU Transmitter Unit Corp.'s (TXU) $440 million Feline feline
of, or pertaining to, members of the family Felidae. See also cat.
see feline panleukopenia (below).
feline actinic dermatitis
see solar dermatitis. PRIDES (initially consisting of 8,800,000 Income PRIDES). The Rating Outlook is Stable. Each unit of Income PRIDES will consist of a contract to purchase TXU common shares at the settlement date (May 16, 2006) and an interest in like amounts of TXU senior notes that are rated 'BBB' maturing May 16, 2008 (with a rate reset on or after Nov. 16, 2005). The senior notes will be pledged to secure the unitholders' contractual obligation to purchase shares of TXU at the contract settlement dates. The return to investors will depend on the value of TXU's common stock at the contractual settlement date. The rating does not comment on the expected common equity value. Proceeds will be used for working capital and other general purposes, including the repayment of commercial paper and to provide advances to subsidiaries for the purpose of funding investments in the US, Europe, and Australia.
The ratings take into account TXU's holding company structure and reliance on upstream cash flows from subsidiaries that have individual debt to service parent debt. Additionally the rating reflects the high percentage of consolidated net income and cash flow coming from non-regulated activities. TXU has made progress in reducing consolidated leverage and remains committed to reducing parent company debt. Reductions in consolidated leverage result primarily from asset sales over the last year. Net Debt to capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. is about 63% and is projected to decline to about 56% by year-end, reflecting asset sales, securitization Securitization
The process of creating a financial instrument by combining other financial assets and then marketing them to investors.
Mortgage backed securities are a perfect example of securitization.
May also be spelled as "securitisation. , and adjustments for hybrid equity.
While parent level debt remains high, management continues to take steps to take action; to move in a matter.
See also: Step to refund straight debt and commercial paper with mandatorily convertible securities and common equity. Other debt is earmarked for paydown from proceeds of asset sales and the expected securitization of Oncor Electric Delivery Co.'s (Oncor) regulatory assets (about $1.3 billion). While it is likely that TXU will make additional investments or acquisitions, management has indicated an intention to fund them with 50% equity and 50% debt, thereby continuing to enhance the capital structure to a level comparable to that of similarly rated holding companies.
TXU owns four major subsidiaries in the US and abroad, engaging in generation, transmission, and distribution of energy; transmission and distribution of natural gas; and energy marketing, telecommunications, and other businesses located primarily in the US, UK, Europe, and Australia. TXU has more than 11 million customers in aggregate.
Fitch rates the obligations of TXU and its subsidiaries as follows:
--Senior unsecured notes 'BBB';
--Commercial paper 'F2'.
TXU U.S Holdings Co. (formerly TXU Electric)
--Senior unsecured debt Unsecured debt
Debt that does not identify specific assets that the debtholder is entitled to in case of default. 'BBB+';
--Preferred stock 'BBB+'.
--First mortgage bonds 'A-';
--Implied senior unsecured debt 'BBB+';
TXU Energy Co. LLC (Logical Link Control) See "LANs" under data link protocol.
LLC - Logical Link Control
--Senior unsecured bonds Noun 1. unsecured bond - the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future
debenture, debenture bond 'BBB+'.
TXU Gas Co.
--Senior notes 'BBB'.
TXU Europe Ltd
--Long-term rating 'BBB';
--Short-term rating 'F3'.
TXU Australia Holdings Ltd.
--Partnership senior unsecured debt 'BBB'.