Fitch Ratings Upgrades IPL & IPALCO.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 upgraded and removed from Rating Watch Positive the ratings of Indianapolis Power & Light Company (IPL (Initial Program Load) Same as boot. 1. IPL - Information Processing Language. 2. IPL - Internet Public Library. 3. IPL - Initial Program Load. 4. IPL - Initial Program Loader. ) and IPALCO IPALCO Indianapolis Power and Light Company Enterprises, Inc. (IPALCO), where they were initially placed on Jan. 18, 2005, pending completion of parent company AES Corporation's (AES) ratings review. The Rating Outlook is Stable. A full description of the rating actions is listed below. IPL and IPALCO's ratings reflect the low business risk associated with IPL's utility operations, the absence of fuel price volatility, and the constructive regulatory environment in Indiana. IPALCO's ratings also consider the structural subordination of IPALCO's debt to that of IPL, the reliance on distributions from IPL to service debt and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , and linkage to much weaker parent company AES. Various regulatory and contractual ring-fencing mechanisms limit IPL's ability to upstream dividend payments and provide some insulation from the credit risk of IPALCO and AES. However, Fitch recognizes that IPL and IPALCO have some exposure and credit linkage to AES. While recognizing the linkage with AES, the upgrades in the ratings of IPL and IPALCO acknowledge the significant progress made in improving AES' credit profile. Following the completion of its review, Fitch upgraded the ratings of AES to reflect the retirement of a substantial amount of parent company recourse debt and improved liquidity. In addition, AES has refinanced several near-term debt maturities and extended the company's debt maturity profile. The company has successfully accessed both the debt and equity markets on a number of occasions in the past 18 months. Furthermore, AES has in place a $450 million 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, which significantly improves the company's liquidity position. Finally, AES management has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the goal of continued debt reduction, committing to $600 million in parent company debt retirements in 2005. In this regard, AES called for early redemption of approximately $112 million of notes in May 2005. These notes were redeemed in full on June 1, 2005. IPALCO is a holding company whose principal subsidiary is IPL. IPL is a regulated electric utility, principally engaged in providing generation, transmission, distribution, and sale of electric energy to more than 460,000 customers in the Indianapolis metropolitan area. About 99% of the company's power generated (3,252 MW net summer capability) is coal-fired. The company plans for a reserve margin of approximately 12%. IPALCO is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of AES. Fitch has upgraded, and removed from Rating Watch, the following ratings: Indianapolis Power & Light Company --First mortgage bonds to 'BBB+' from 'BBB'; --Secured PCRBs to 'BBB+' from 'BBB'; --Unsecured PCRBs to 'BBB' from 'BBB-'; --Preferred stock to 'BBB-' from 'BB+'; --Rating Outlook Stable. IPALCO Enterprises, Inc. --Senior notes to 'BBB-' from 'BB'; --Rating Outlook Stable. 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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