Fitch Ratings updates public power rating guidelines

May 23, 2002 — Fitch Ratings has updated rating guidelines for the public power sector to reflect the significant changes taking place across the electric, natural gas, and energy industries.

‘Most public power issuers are solidly positioned and continue to perform well,’ said Alan Spen, managing director, Fitch Ratings. ‘Through a combination of good planning, a more manageable pace of deregulation, and good fortune the majority of public power agencies have been able to weather the competitive storm while being less adversely affected than many of the investor-owned utilities and independent generation companies.’

To help in its evaluation of public power, Fitch has developed a list of key credit ratios dealing primarily with the financial performance of municipal electric and rural electric cooperatives. The ratios focus on short-term liquidity measures, debt-to-capital determinants, plus traditional comparisons, such as debt service coverage.

‘Fitch seeks to provide investors with as full a picture as possible of a public power system’s operating and financial condition and how it compares with other similarly rated credits and the overall industry,’ said Spen. ‘The new report summarizes Fitch’s current rating methodology and highlights key industry trends that Fitch believes will affect the electric sector over the near term.’

The new ‘Public Power Rating Guidelines’ can be found on the Fitch web site at http://www.fitchratings.com. The study ‘Public Power Financial Peer Study’ can also be found on the Fitch web site.

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