Fitch Revises Energy New Orleans' Outlook to Positive; Affirms 'BB' IDR.CHICAGO -- 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 revised the Rating Outlook of Entergy New Orleans, Inc. (ENOI) to Positive from Stable and affirmed the 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. ) and outstanding debt ratings for as follows: --IDR at 'BB'; --Senior secured at 'BBB-'; --Preferred stock at 'BB'. Approximately $260 million of debt is affected. The Outlook revision to Positive reflects: --Stronger than expected credit metrics driven by customer growth; --A more constructive regulatory environment; --Recovery of storm damage costs from insurance and other sources; and --Slower than expected capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , particularly spending to rebuild the gas system. For 2008-2009, Fitch projects that ENOI's FFO FFO See: Funds from operations interest coverage will range from 5.0 times (x) to 6.0x, while debt-to-FFO will range from 3.0x to 4.0x. These projections assume ENOI pays down the $30 million of first mortgage bonds due later this year. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses is expected to cover maintenance capital spending, while cash from insurance and other sources is expected to cover gas system rebuild costs for the next several years. Fitch expects to upgrade ENOI's ratings if ETR's spin-off of its non-regulated nuclear assets yields a credit neutral to positive outcome, and if there is a neutral to positive outcome of the base rate case ENOI will file in July 2008 for rates to begin in March 2009. A negative outcome of either these issues would likely result in Fitch revising ENOI's Rating Outlook to either Stable or Negative. In addition, Fitch notes that the service territory is susceptible to future storms and storm damage could result in negative rating actions. ENOI is a regulated utility that provides electric and gas service to customers located in and around the City of New Orleans. 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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