Key Financial Issues: Rating for ENW bonds

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Key Financial Issues Rating for ENW bonds

• On the eve of a major Energy Northwest
  Refinancing, three major bond rating houses
  issued new ratings for Energy Northwest bonds
  backed by BPA.
• Standard Poors reaffirmed its existing AA-
  rating, but added a negative outlook.
• Fitch Ratings downgraded Energy Northwest bonds
  backed by BPA from AA to AA-, but changed from
  credit watch negative to credit watch stable.
• Moodys Investors Service affirmed its existing
  bond rating of Aa1 for BPA-backed bonds.
• SP indicated that a ratings downgrade could be
  prompted by
• The use of any debt restructuring savings to
  offset current operating expenses, which would
  constitute a deferral of the cost recovery needed
  into future years
• Failure to implement an adequate SN CRAC, which
  is needed at 16 absent any additional cost cuts,
  to keep reserves at a minimum operating level or
• Any "restructuring" of federal Treasury
  obligations, although Bonneville does have the
  legal flexibility to "restructure" its federal
  obligations at any time with minimal financial
  penalties.

DOE March, 03
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Key Financial Issues (continued)
Fish Mediation Four meetings scheduled through
May 22. Parties will then decide whether to
continue negotiations. No formal agreement on
2002 actions, but will now begin discussion of
longer-term issues. Bond Rating In March, when
we refinanced Energy Northwest bonds, Moodys,
Fitch, and Standard Poors affirmed our ratings
of Aa1, AA, and AA- Customer Proposal IOUs and
publicly-owned utilities presented to BPA a
proposal on how to distribute FCRPS benefits
among IOUs and publics after FY 2006. BPA will
be analyzing the proposal over the next several
weeks. IOUs and publics will be sharing the
proposal with the DSIs and Northwest conservation
and environmental groups.
DOE April, 02