Fitch Ratings Dwngrs $650MM Covanta Muni Solid Waste Debt.

Business Editors

CHICAGO/NEW YORK--(BUSINESS WIRE)--Feb. 28, 2002

Fitch Ratings downgrades to 'CCC' from 'B' the unenhanced or underlying ratings of approximately $650 million of outstanding solid waste project bonds (primarily tax-exempt bonds), listed below, which are payable from revenues associated with waste-to-energy projects owned or leased by subsidiaries of Covanta Energy Corp. (Covanta), formerly Ogden Corp. The 'CCC' ratings remain on Rating Watch Evolving, indicating the reasonable probability that they may be further revised up or down in the near term. Prior to today's rating actions, Fitch downgraded the same securities to the 'B' rating level on Jan. 30, 2002, and put those ratings on Rating Watch Evolving. Today's downgrades reflect further assessments made by Fitch since Jan. 30 of Covanta's financial condition and the structures of the project bonds.

Fitch Ratings believes that debt service on bonds payable from revenues associated with these plants may be vulnerable to interruptions resulting from future changes in Covanta's corporate credit quality. Covanta's recently rapid credit deterioration has increased the risk of corporate bankruptcy, which could threaten the continued timely payment of debt service on the affected bonds. Fitch also is concerned about the potential for deterioration in Covanta's financial condition to negatively affect the level and quality of operations at the subject waste-to-energy projects, which could degrade the technical and financial performance of these projects. In line with our aforesaid concern, a Feb. 22 press release, issued by the Onondaga County Resource Recovery Agency (based in North Syracuse, NY), announced the intent of the agency to terminate its relationship with Covanta 'to assure everyone that the funds will be available to operate, maintain, and make needed repairs' at its waste facility. Fitch does not rate Covanta Energy's securities.

Downgraded to 'CCC' and remaining on Rating Watch Evolving are the approximately $650 million outstanding bonds listed below, which are payable primarily from revenues associated with five Covanta-owned or Covanta-leased waste-to-energy projects:

--Bristol Resource Recovery Facility Operating Committee, CT solid waste revenue bonds (Ogden Martin Systems of Bristol, Inc. Project), 1995 series, unenhanced rating downgraded to 'CCC' from 'B' - Rating Watch Evolving;

--Massachusetts Industrial Finance Agency and Massachusetts Development Finance Agency resource recovery revenue bonds (Ogden Haverhill Project), unenhanced rating downgraded to 'CCC' from 'B' - Rating Watch Evolving;

--Onondaga County Resource Recovery Agency, NY project revenue bonds, series 1992, unenhanced rating downgraded to 'CCC' from 'B' - Rating Watch Evolving;

--Suffolk County Industrial Development Agency, NY solid waste disposal facility revenue bonds (Ogden Martin Systems of Huntington Limited Partnership Recovery Facility), series 1999 (insured: Ambac), unenhanced rating downgraded to 'CCC' from 'B' - Rating Watch Evolving;

--Union County Utilities Authority, NJ solid waste landfill taxable revenue bonds, series 1998 (insured: Ambac), unenhanced rating downgraded to 'CCC' from 'B' - Rating Watch Evolving;

--Union County Utilities Authority, NJ solid waste facility senior lease revenue bonds, series 1998 A & B (Ogden Martin Systems of Union, Inc. Lessee), unenhanced rating downgraded to 'CCC' from 'B' - Rating Watch Evolving;

--Union County Utilities Authority, NJ solid waste facility senior lease revenue bonds (Ogden Martin Systems of Union, Inc. Lessee) series 1998A (insured: Ambac), unenhanced rating downgraded to 'CCC' from 'B' - Rating Watch Evolving; and

--Union County Utilities Authority, NJ solid waste facilities subordinate lease revenue bonds, series 1998A (Ogden Martin Systems of Union, Inc. Lessee) (insured: Ambac), unenhanced rating downgraded to 'CCC' from 'B' - Rating Watch Evolving.

'CCC' category ratings indicate that default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments.

Approximately $850 million of outstanding municipal bonds, secured by payment obligations of certain public entities, are affirmed at their existing ratings and remain on Rating Watch Negative or Evolving, as listed below, in recognition of possible operating and other risks that could result from Covanta's continuing credit troubles:

--Lee County, FL solid waste system refunding revenue bonds, series 2001 (insured: MBIA), unenhanced rating of 'A-' - Rating Watch Negative;

--Lee County, FL solid waste system revenue bonds, series 1995 (insured: MBIA), unenhanced rating of 'A-' - Rating Watch Negative;

--Northeast Maryland Waste Disposal Authority, MD solid waste revenue bonds (Montgomery County Resource Recovery Project), series 1993 A and B, unenhanced rating of 'AA-' - Rating Watch Negative; and

--Onondaga County Resource Recovery Agency, NY system revenue bonds, 1992 series, unenhanced rating of 'B' - Rating Watch Evolving.

Many of the bonds listed are insured by one of the major bond insurers. This rating action affects only unenhanced and underlying ratings. Enhanced ratings, where applicable, are unchanged.

For more information, see Fitch Ratings' earlier releases on this matter, available at the agency's web site: www.fitchratings.com: 'Fitch Ratings Lowers $650MM Muni Solid Waste Debt to 'B' (Jan. 30, 2002),' 'Fitch Ratings Removes Rtg Wtch Neg On Montgomery Cnty MD Sol Wst Rev Bnds (Feb. 6, 2002),' and 'Fitch Monitoring Solid Waste Bonds Connected With Covanta (Jan. 25, 2002).'