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.
09 Dec 2002
MOODY'S DOWNGRADES RATINGS OF DYNEGY INC., DYNEGY HOLDINGS (SR. UNSECURED TO Caa2), ILLINOVA AND ILLINOIS POWER; RATINGS OUTLOOK IS NEGATIVE
Approximately $4.9 Billion of Debt Securities Affected.
New York, December 09, 2002 -- Moody's Investors Service downgraded the ratings of Dynegy Inc.
and its subsidiaries due to ongoing concerns about the level of cashflow
that the restructured company will be able to generate relative to its
high financial leverage, which will likely result in minimal amounts
of free cashflow available for further debt reduction, and continuing
uncertainty related to the ultimate resolution of the company's debt obligations
coming due over the next several years, including $1.6
billion of bank credit facilities in the second quarter of 2003.
Dynegy's senior implied rating was lowered to B3 from B2 and the senior
unsecured rating of Dynegy Holdings Inc. (DHI) the primary operating
subsidiary, was lowered to Caa2 from B3. The senior secured
rating of Illinois Power (IP) was lowered to B3 from B1.
DHI's senior unsecured ratings continue to be notched down from the senior
implied rating due to the amount of current secured debt coupled with
the expectation that future renewals of existing bank debt will be done
on a secured basis, effectively subordinating the senior unsecured
The ratings outlook remains negative primarily due to (i) a continuing
lack of investor and counterparty confidence that has limited access to
public debt markets and negatively impacted the company's remaining businesses;
(ii) uncertainty surrounding the FERC and SEC investigations and;
(iii) uncertainty relating to ongoing re-audits and reviews of
the company's financial statements from 1999 through 2001.
Ratings downgraded include:
Dynegy Inc. - Shelf registration to (P)Ca/(P)C from (P)Caa2/(P)Ca
Dynegy Holdings Inc. - Senior unsecured debt rating to Caa2
from B3, shelf registration to (P)Caa2/(P)Ca/(P)C from (P)B3/(P)Caa2/(P)Caa3,
Subordinated Trust Preferred Securities to Ca from Caa2.
Illinova Corp - Senior unsecured debt rating to Caa2 from B3
Illinois Power Company - Senior secured rating to B3 from B1 and
senior unsecured debt ratings to Caa1 from B2, shelf registration
to (P)B3/(P)Caa1/(P)Ca from (P)B1/(P)B2/(P)Caa2, Preferred Stock
to Ca from Caa2
Roseton-Danskammer - Pass through certificates to Caa2 from
The ratings downgrade reflects ongoing concerns surrounding the level
of future cashflow from Dynegy's non-trading and marketing businesses
relative to its total debt of $9.3 billion. Despite
some positive attributes associated with a portion of the cashflow expected
from the company's power generation, natural gas liquids,
and Illinois Power (regulated distribution) businesses, such as
relatively stable cashflows supported by a combination of long-term
contracts, key customer relationships in strategic locations,
and regulation, the primary concern continues to be the amount of
debt these businesses need to support. Moody's stated that
one of Dynegy's more significant challenges in the near to medium
term will be achieving a permanent capital structure that is more appropriate
given the level of cashflow that can be reasonably expected from these
businesses as well as the inherent risks associated with them.
Furthermore, Dynegy has not yet completed its contemplated sale
or shut-down of the communications business, and it remains
unclear how successful the company will be in restructuring its tolling
agreements, and both continue to consume cash.
Dynegy's total on and off balance sheet debt currently stands at
$9.3 billion and consists of; $6.2 billion
at Dynegy Holdings Inc. (including outstanding L/C's),
$100 million at Illinova, $2.0 billion at Illinois
Power (including $540 million of transition funding notes),
$360 million of DGC leases, and approximately $600
million of unconsolidated subsidiary debt. These amounts do not
include $1.5 billion of CVX preferred securities that are
scheduled to mature in November 2003 and it remains unclear how this maturity
will be dealt with. Given the insufficient level of operating cashflow
and the lack of significant additional assets available for sale,
debt protection measures are likely to remain very weak.
The rating downgrades also reflect a current liquidity profile that appears
adequate to deal with all known financial obligations up to April/May
of 2003 when DHI's $1.3 billion in bank facilities
and Illinois Power's $300 million bank facility comes due.
The most significant maturity prior to the bank credit facilities is a
$200 million secured facility that matures in January 2003.
None of the bank credit facilities can be extended via a term out option.
Dynegy currently has approximately $940 million of cash and $120
million of additional borrowing capacity, for total liquidity of
$1.06 billion, which is insufficient to retire the
bank facilities absent additional cashflow from operations.
Dynegy is currently in the process of negotiating with its banks to replace
these facilities with a secured facility. In addition, if
the company violates the EBITDA-to-interest covenant contained
in these agreements, which is possible, the Lender's
have the ability to accelerate the outstanding obligations under these
facilities, which could also trigger cross-acceleration provisions
in a significant portion of Dynegy's other outstanding debt.
If Dynegy does violate this covenant, it will seek a waiver from
the Lenders, however there is no assurance the company would be
granted such a waiver, if needed. At present, how successful
Dynegy will be in its efforts to put a new facility in place, and
the key terms of that facility, are unknown. Clearly,
Dynegy must successfully refinance these facilities before it can move
forward with the rest of its restructuring plans. Provided the
company is able to refinance its existing bank lines, another $190
million of Mortgage Bonds at Illinois Power matures in August and September
of 2003. A combination of asset sale proceeds ($239 million
from the sale IP's electric transmission system) and proceeds from
a planned issuance of new Mortgage Bonds at Illinois Power are intended
to provide the cash to retire these obligations. Finally,
Moody's notes Dynegy's current weak credit profile makes executing
such plans extremely challenging.
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
Vice President - Senior Analyst
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.