PPL Corp & PPL Capital Lowered by Fitch Ratings; PPL Energy Supply Outlook Negative.Business Editors NEW YORK--(BUSINESS WIRE)--May 13, 2003 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 lowered the outstanding senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. ratings of PPL PPL - Polymorphic Programming Language. An interactive, extensible language, based on APL, from Harvard University. ["Some Features of PPL - A Polymorphic Programming Language", T.A. Standish, SIGPLAN Notices 4(8) (Aug 1969)]. Capital Funding, Inc and the indicative senior unsecured debt rating of PPL Corp. to 'BBB' from 'BBB+'. The preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. rating of PPL Capital Funding Inc. is lowered to 'BBB-' from 'BBB'. The senior unsecured debt ratings and commercial paper ratings of PPL Energy Supply are affirmed at 'BBB+' and 'F2', respectively. The Rating Outlook for each of the entities mentioned above is changed to Negative from Stable. The revised ratings for PPL Corp. and PPL Capital Funding, Inc. reflect the structural subordination of PPL Corp. to that of its subsidiaries and expectations of lower cash flow from PPL Electric Utilities until at least early 2005. The utilities earnings and cash flow have been reduced by higher 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 a rate freeze that expires Jan. 1, 2005. The change in Outlook for PPL Corp., PPL Capital Funding and PPL Energy Supply to Negative from Stable results from an increase in the portion of PPL's generating asset portfolio that is dependent on merchant sales (from the addition of new plant over the past year), continued weakness in U.S. merchant energy markets, and exposure to international distribution assets primarily in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and the UK. The revised outlook for PPL Energy Supply also considers management's plan to retire about $800 million of PPL Capital Funding debt maturities over the next five years and the need to raise a portion of those funds through the issuance of additional debt at PPL Energy Supply. Favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. , PPL Energy Supply derives significant earnings and cash flow from a long-term supply contract with affiliate PPL Electric Utilities that together with other contractual commitments on average account for about 70% PPL Energy Supply's gross margin over the next five years. The contract between PPL Energy Supply and PPL Electric Utilities extends through 2009. PPL Corp. is an energy and utility holding company. PPL Capital Funding is a financing subsidiary of PPL Corp. |
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