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.
17 Mar 2004
MOODY'S DOWNGRADES VARIOUS CE ELECTRIC UK FUNDING GROUP RATINGS BUT AFFIRMS CEUK'S Baa3 RATING; NEGATIVE OUTLOOK
London, 17 March 2004 -- Moody's Investors Service today downgraded various ratings associated
with entities within the CE Electric UK Funding Company (CEUK) but affirmed
other ratings including the Baa3 senior unsecured debt rating of CEUK
itself (see list below for full details). The outlook on all ratings
Today's rating actions reflect a re-assessment of the relative
risk profiles of various members of the group in light of (a) its group
structure; (b) its debt maturity profile in the context of its overall
financial profile; and (c) specific restrictions within one of its
bonds impacting financial flexibility within the group. The effect
of the rating actions is to harmonise the ratings of CEUK's two
regulated UK electricity distribution networks at the Baa1 level and the
ratings of CEUK's other debt-issuing and support entities
at the Baa3 level with the exception of Northern Electric plc as discussed
Specifically, Moody's has downgraded by one notch the ratings
of Northern Electric plc (NE plc) and its regulated electricity distribution
network business Northern Electric Distribution Limited (NEDL) to Baa2
and Baa1, respectively. NE plc does not have any debt outstanding
but guarantees debt of its subsidiary NEDL. Moody's has also
downgraded by one notch the various guaranteed ratings of the Yorkshire
Power Group Limited (YPG), including the debt ratings of Yorkshire
Power Finance Limited, Yorkshire Power Finance 2 Limited and the
Yorkshire Power Pass-Through Asset Trust to Baa3, but has
affirmed the Baa1 rating of YPG's regulated distribution business
Yorkshire Electricity Distribution plc (YEDL). The Baa3 rating
associated with Yorkshire Capital Trust 1 has been withdrawn following
the redemption of its outstanding debt during 2003. The Baa3 senior
unsecured debt rating of CEUK has also been affirmed.
Following various corporate transactions in recent years, CEUK is
now essentially a grouping of holding companies owning two UK regulated
electricity distribution businesses, NEDL and YEDL, with debt
located both at various holding and intermediate holding company levels
and within the two regulated distribution businesses. Moody's
regards the business and financial risk profiles of each of the two regulated
businesses as being strong on a stand-alone basis in light of their
generally stable regulated revenue bases, their relatively good
performance during the current regulatory price review period and the
low level of direct external debt at the two regulated distribution businesses.
NEDL currently exhibits an improving ratio of net external financial debt
to Regulatory Asset Value (RAV) of around 30% and a retained cash
flow to net external financial debt in the 20%-30%
range. YEDL's financial profile shows a net external financial
debt to RAV in the low 20s and strong retained cash flow to net external
financial debt of approximately 50-60%.
The consolidated CEUK profile, which is almost entirely reliant
on cash distributions from these two regulated network businesses,
has weakened in recent years as a result of (i) the substantial debt assumed
in conjunction with the acquisition of YPG, which owns YEDL,
and (ii) dividend distributions following other non-core asset
sales. Moody's expects that CEUK will not be paying dividends
over the medium term in light of its more constrained financial risk profile.
Moody's assumes that CEUK's ratio of net financial debt (excluding
related party debt) to RAV, currently in the 90% range which
Moody's regards as being too high for the rating category,
will materially improve over coming years as the company applies cash
flow to net debt reduction in lieu of dividend distributions and refinances
maturing debt with subordinated related party financing from entities
within CEUK's parent, MidAmerican Energy Holdings Company
(MEHC) (rated Baa3; positive outlook), a privately held company
owned in part by Berkshire Hathaway (Aaa) which has an 80.5%
economic interest. It also assumes that retained cash flow to net
financial debt (excluding related party debt), which had recently
been in the single-digit range, will remain in the low double-digit
range while dividend payments are suspended.
The decision to re-align the various ratings within the group follows
a re-assessment of the impact that restrictions within the CEUK
AMBAC-guaranteed GBP200 million bonds due 2022 have on financial
flexibility within the group. Under the terms of the AMBAC guarantee,
CEUK is restricted from either refinancing externally or incurring new
external debt at any level below the CEUK holding company level.
The group is permitted to have working capital facilities up to a total
amount of GBP 125 million available to NEDL and YEDL though committed
facilities are not in place at either entity at this time. As mentioned
above, the group is also expected to rely over the near term upon
related party financing from entities within CEUK's parent,
MEHC, to the CEUK group which is being provided on a subordinated,
though uncommitted, basis at this time.
MEHC not only continues to regard CEUK as a core unit within its consolidated
corporate structure, but was also directly involved in the decisions
relating to the recent transactions that have modified its corporate and
financial risk profile and continues to have good access to capital,
both through the debt capital markets and through shareholder contributions
from Berkshire Hathaway. However, there is no direct committed
support provided by MEHC to CEUK, which makes it difficult to factor
support into the overall rating. A further issue of concern to
Moody's is the fact that CEUK has no committed, alternative
sources of liquidity or credit facility back-up aside from available
cash resources which are adequate to meet its 2004 debt-refinancing
Moody's therefore believes it appropriate to regard the credit risk
profiles of the other YPG debt-issuing and support entities,
aside from that of YEDL, as being aligned with the credit risk profile
of CEUK as a consequence of the above mentioned debt issuance restriction,
resulting in a harmonisation of those ratings at the Baa3 level.
The decision to harmonise the credit risk profiles of NEDL and YEDL at
the Baa1 level reflects the shared reliance by CEUK, particularly
in light of the debt issuance restrictions, on the cash flow profiles
of the networks for servicing holding and intermediate holding company
Moody's also notes that there is a substantial amount of debt maturing
over the medium term at various levels through the corporate structure
that will need to be refinanced at the CEUK level assuming that the AMBAC-related
restriction remains in place and working capital facilities are not put
in place at either NEDL or YEDL, either through the debt capital
markets or through related party support from MEHC. Moody's
will be monitoring closely related party contributions to ensure that
liquidity within the group remains adequate for meeting debt maturities,
with a particular focus on the October 2005 GBP100 million NEDL bond.
CEUK's profile has become substantially reliant over the medium
term on continued support from MEHC in light of this refinancing risk
exposure, particularly given its fairly leveraged profile,
as discussed above. The negative outlook on all CEUK-related
ratings thus reflects its weak liquidity and lack of committed alternative
sources of financing either externally or from its parent MEHC.
Any rating stabilisation will depend on a material reduction in CEUK's
overall external debt and the mitigation of its exposure to refinancing
risk through committed refinancing alternatives for debt maturities or
cash contributions by MEHC.
The negative outlook also reflects in part some uncertainties as to the
impact of the ongoing regulatory price review, which could adversely
impact the group's cash flow and debt protection measures during
the next regulatory price review period. Moody's recognises
that UK energy regulator Ofgem intends to implement a price formula for
the 2005-2010 period aimed at ensuring an acceptable return on
capital for investors as well as adequate access to the debt capital markets
for the regulated entities. Nevertheless, certain issues
for the next regulatory price review period could impact the overall profile,
including the following: (a) how outperformance during the current
regulatory price review period is to be treated going forwards; (b)
how possible increases in underfunded pension obligations are treated;
and (c) the possible impact of higher network infrastructure charges and
cash taxes on retained cash flow. Moody's will be monitoring
these factors as part of its assessment of Ofgem's ongoing price
The following ratings are affected as a result of today's rating
CE Electric UK Funding Co.:
- Senior unsecured debt rating: affirmed at Baa3.
Northern Electric plc:
- Long-term issuer rating: downgraded to Baa2 from
Baa1. Negative outlook
Northern Electric Distribution Limited ("NEDL"):
- Long-term issuer rating: downgraded to Baa1 from
A3. Negative outlook
Northern Electric Finance Limited:
- Senior unsecured debt ratings (backed by NEDL): downgraded
to Baa1 from A3. Negative outlook
Yorkshire Power Finance Limited:
- Backed senior unsecured debt rating: downgraded to Baa3
from Baa2. Negative outlook
Yorkshire Power Finance 2 Limited:
- Backed senior unsecured debt rating: assigned at Baa3.
Yorkshire Capital Trust I:
- Backed preferred stock: withdrawn
Yorkshire Power Pass-Through Asset Trust:
- Senior unsecured debt rating: downgraded to Baa3 from Baa2.
Yorkshire Electricity Distribution plc:
- Long-term issuer rating: affirmed at Baa1.
- Backed senior unsecured debt ratings: affirmed at Baa1.
Headquartered in Newcastle upon Tyne, England, CE Electric
UK Funding Company is the holding company of two regulated monopoly electricity
network businesses, Northern Electric and Yorkshire Electric.
The group is now almost exclusively focused on electricity distribution,
with only very few non-distribution activities remaining.
The company is wholly owned by Midamerican Energy Holdings Co.
(MEHC), a US utility privately owned by an investor group that includes
European Corporate Finance
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
David G. Staples
Senior Vice President
European Corporate Finance
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
No Related Data.
© 2020 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/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH CURRENT OPINIONS. MOODY'S INVESTORS SERVICE 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 INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND OTHER 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. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS 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,
ASSESSMENTS, OTHER OPINIONS, AND 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, ASSESSMENTS, OTHER OPINIONS OR 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.
MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS AND 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 its 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, ASSESSMENT, 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 credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service 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 credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit 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.