Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
05 Aug 2003
MOODY'S CONFIRMS RATINGS FOR DYNEGY INC. AND ITS SUBSIDIARIES; ASSIGNS B2 RATING TO DHI'S SECURED BANK CREDIT FACILITIES AND B3 RATING TO NEW SENIOR SECURED NOTES; ASSIGNS Caa2 RATING TO DYN'S CONV. SUB. DEBENTURES. THE RATINGS OUTLOOK IS DEVELOPING.
Approximately $8.6 Billion in debt affected
New York, August 05, 2003 -- Moody's Investors Service confirmed the ratings for Dynegy Inc.
and its subsidiaries and maintained a developing outlook following the
company's announced pricing of $1.450 billion of new second
priority senior secured notes and $175 million of convertible subordinated
debentures. These securities will be privately placed and the offering
is expected to close on or about August 11, 2003. The completion
of these offerings coupled with the cash tender offer to purchase all
of the outstanding Dynegy Holdings Inc. (DHI) Senior Notes due
in 2005 and 2006 (totaling $650 million), the repayment of
certain secured bank indebtedness and the restructuring of the ChevronTexaco
Series B preferred stock are all key elements of the company's previously
announced refinancing and restructuring plans. Proceeds from these
offerings and a portion of available cash are going to be used to fund
the purchase of the DHI's Senior Notes subject to the tender offer (approx.
$585 million tendered), repayment of DHI's $200 million
secured term loan, repayment of the Black Thunder secured financing
($696 million), a portion of DHI's $360 million secured
term loan (approx. $116 million) and the $225 million
cash payment to ChevronTexaco.
Following the completion of these transactions and the expected repayment
of a $95 million senior note at Illinova (due Feb. 1,
2004), Dynegy will have no significant public debt maturities until
July 15, 2008 when DHI's newly issued $225 million second
priority senior secured floating rate notes are due, June 15,
2009 when Illinois Power's $250 million 7.5% FMB
are due and April 1, 2011 when DHI's $500 million 6.875%
Senior Notes are due. The company will, however, still
need to refinance or replace its $1.1 billion secured revolving
credit facility by February 15, 2005, the $170 million
CoGen Lyondell credit facility by August 11, 2005, the remaining
outstanding balance on its $360 million term loan by December 15,
2005, and continue to amortize the project Alpha debt (approx.
$17 million per quarter) and absorb the negative cash impact of
its remaining tolling agreements. These factors, as well
as debt levels that remain high, minimal amounts of free cash flow
and ongoing litigation, all contributed to Moody's decision to maintain
a developing outlook. Moody's will continue to assess Dynegy's
success in addressing these issues and will consider a positive ratings
outlook or possibly a review for a one-notch upgrade once there
is a greater degree of certainty surrounding the company's ability to
refinance its remaining maturities in 2005, its ability to maintain
adequate liquidity, and its ability to meet or exceed projected
operating results over the near to medium term. Furthermore,
Moody's notes the prospects for an upgrade of DHI's Caa2 senior unsecured
debt ratings remains remote given the amount of secured debt in Dynegy's
The B3 rating assigned to the new second priority senior secured notes
reflects: (i) Moody's estimate of asset coverage provided by a collateral
package consisting of second priority liens on certain real, leased
and personal property of DHI and the guarantors (unconditional joint and
several guarantees from essentially all of DHI's wholly owned material
U.S. subsidiaries that guarantee borrowings under the bank
credit agreement); a second priority pledge of 100% of the
stock and equity interests of certain of DHI's and the guarantors' current
and future domestic subsidiaries and 66% of the stock and equity
interests of certain of DHI's and the guarantors' current and future foreign
subsidiaries, (ii) restrictions related to the amount of Parity
Liens and other Liens securing indebtedness, including a maximum
$1.5 billion plus 10% of consolidated net assets
of DHI, (iii) restrictions on the amount of permitted Priority Liens,
including an absolute cap equivalent to indebtedness currently outstanding
under the bank credit agreement (assuming the $1.1 billion
revolver was fully funded)or any other credit facility and requirements
to prepay certain amounts of indebtedness secured by Priority Liens with
the proceeds of future debt offerings, equity offerings, and
asset sales proceeds, (iv) certain restrictions on payments,
and (v) the lack of support from Illinois Power or any of its subsidiaries,
which will not guarantee the Notes. These were the primary factors
contributing to Moody's decision to rate the second priority senior secured
notes B3 (same as the senior implied rating) while notching the secured
bank credit facilities B2, up one notch from the B3 senior implied.
The Caa2 rating assigned to the Dynegy Inc. convertible subordinated
debentures is primarily driven by the guarantee provided by DHI on a senior
unsecured basis, effectively placing this security pari passu with
DHI's other senior unsecured debt
While the successful completion of these transactions does provide clarity
around a significant portion of the refinancing challenges the company
faced in 2004-2006, it doesn't address the significant amount
of debt remaining in Dynegy's capital structure. Reducing the $1.5
billion in preferred stock held by ChevronTexaco to $850 million
is a positive development, but significant incremental debt reduction
is still needed. Moody's estimates Dynegy will have approximately
$8.2 billion of debt (incl. outstanding L/C's) once
these refinancings are completed. Furthermore, maintenance
levels of capital spending and cash interest costs are likely to consume
the bulk of the cash flow generated from operations, resulting in
limited amounts of free cash flow available for material amounts of debt
reduction. Therefore, total leverage will continue to be
a key ratings consideration that will likely limit the upside in Dynegy's
ratings over the near to medium term.
Ratings confirmed for Dynegy Inc. and its subsidiaries are as follows:
Dynegy Inc. - (P)Ca/(P)C shelf registration
Dynegy Holdings Inc. - B3 senior implied, Caa2 senior
unsecured debt, (P)Caa2/(P)Ca/(P)C shelf registration, and
Ca sub. trust preferred securities
Illinova Corp - Caa2 senior unsecured debt
Illinois Power Company - B3 sr. secured debt, Caa1
sr. unsecured debt, (P)B3/(P)Caa1/(P)Ca shelf registration,
and Ca preferred stock
Roseton-Danskammer Pass through certificates Caa2
New ratings assigned are:
Dynegy Holdings Inc. - Second priority senior secured notes
consisting of; $225 million of floating rate notes due July
15, 2008, $525 million of 9.875% notes
due July 15, 2010, and $700 million of 10.125%
notes due July 15, 2013 all rated B3.
Dynegy Inc. - 4.75% convertible subordinated
debentures due August 15, 2023 guaranteed on a senior unsecured
basis by Dynegy Holdings Inc. rated Caa2
Headquartered in Houston, Texas, Dynegy Inc. is the
parent of Dynegy Holdings and Illinova Corp. Dynegy's primary businesses
are power generation and natural gas liquids. Illinova Corp.'s
principal subsidiary is Illinois Power Company, an electric and
gas transmission and distribution company
Corporate Finance Group
Moody's Investors Service
John C. Cassidy
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.