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.
13 Jul 2010
$244.1 million of asset backed securities rated.
New York, July 13, 2010 -- Moody's Investors Service has assigned the provisional rating of (P) Aaa
to the system restoration bonds, Series 2010, to be issued
by Louisiana Local Government Environmental Facilities and Community Development
Authority (LCDA) (Issuer), a political subdivision of the State
of Louisiana. The transaction will be serviced by Entergy Gulf
States Louisiana, LLC. ("EGSL") (Baa2),
in whose service area the system restoration charges will be collected
and the proceeds of the transaction will be used by EGSL for system restoration
expenses within its service area.The complete rating action is
Issuer: Louisiana Local Government Environmental Facilities and
Community Development Authority (LCDA)
$97,000,000 System Restoration Bonds, Tranche
A-1, rated (P) Aaa
$60,000,000 System Restoration Bonds, Tranche
A-2 rated (P) Aaa
$87,100,000 System Restoration Bonds, Tranche
A-3, rated (P) Aaa
The ratings are based on the State of Louisiana legislation referred as
the Restoration Law, and the state's non-impairment
pledge; the irrevocable financing order by the Louisiana Public Service
Commission (LPSC) and the LPSC pledge; the remote likelihood of a
successful legislative challenge to the Restoration Law, the financing
order, and the system restoration charge authorized thereunder;
the size and diversity of the ratepayer base from whom the system restoration
charge will be collected; credit enhancement consisting of dynamic
adjustments or true-up to the system restoration charge and a Debt
Service Reserve Subaccount (DSRS) with a required balance equal to 0.50%
of the initial principal balance of the bonds; and, Entergy
Gulf States Louisiana, LLC. (EGSL) (Baa2)'s ability
and experience as a servicer.
The bonds are backed by system restoration property created by the state's
legislation and an irrevocable financing order issued by the LPSC that
authorizes the imposition and collection of a system restoration charge
to all existing and future electric customers subject to LPSC jurisdiction,
and receiving electric transmission or distribution service, or
both from EGSL or its successors or assignees, including all individuals,
corporations, other business entities and governmental and municipal
entities, subject to certain exceptions for self-generators.
The system restoration charge will be adjusted as required or necessary
to make the debt service payments. The system restoration charge
must be mandatorily adjusted at least semi-annually to correct
any under collections or over-collections to ensure timely payment
of debt service. The financing order permits more frequently true-up
adjustment or interim adjustments if the servicer forecasts that there
are insufficient collections to make the required debt service payments
or to replenish any draws under the DSRS. The financing order also
allows non-standard true-up adjustments to address any material
deviations between the system restoration charge collections and the required
debt service amount. If any bonds are still remaining after the
scheduled final maturity date, then mandatory quarterly true-up
adjustments will be made until the bonds and all associated costs are
paid in full.
There is no limit on level of the system restoration charge that may be
imposed on customers over the life of the bonds in order to pay scheduled
principal and interest on the bonds on a timely basis.
There is approximately two-year tail period between the scheduled
final maturity date and the final maturity date of the bonds, which
provides sufficient cushion to true up the system restoration charge to
pay off the bonds in full by the final maturity date.
Securitization is expected to provide savings or economic benefits to
the consumers vs. the traditional financing methods.
The system restoration bonds will be issued by LCDA as a conduit issuer.
The Issuer as no taxing power and receives no appropriations from the
State or any governmental body. The Issuer is an "issuer"
within the meaning of the Restoration Law. The Issuer will use
the net proceeds of the bonds to make a loan to Louisiana Utilities Restoration
Corporation, a not-for-profit public corporation created
by the Restoration Law, which is solely vested with the system restoration
property. The system restoration property is pledged to the Issuer
as security for the bonds.
The principal methodology used in rating the transaction is described
below. Other methodologies and factors that may have been considered
in the process of rating this issuer can also be found in the Rating Methodologies
sub-directory on www.moodys.com.
V-SCORE AND LOSS SENSITIVITY
Moody's V Score. The V Score for this transaction is Low,
which is the same as the V score assigned for the utility fee bonds or
stranded costs bonds sector. The V Score indicates "Low" uncertainty
about critical assumptions.
The Low score is primarily driven by the low volatility in performance
of the previous securitization serviced by ELL, the good track record
of the utilities fee sector as a whole and the low complexity and market
value volatility with regards to such transactions. The sector
has existed for more than ten years and such bonds have survived one bankruptcy
of a servicer, the California energy crisis and the recent economic
Moody's V Scores provide a relative assessment of the quality of available
credit information and the potential variability around the various inputs
to a rating determination. The V Score ranks transactions by the
potential for significant rating changes owing to uncertainty around the
assumptions due to data quality, historical performance, the
level of disclosure, transaction complexity, the modeling
and the transaction governance that underlie the ratings. V Scores
apply to the entire transaction (rather than individual tranches).
Moody's Parameter Sensitivities. While the bonds are subject to
political, regulatory and legal risks, we view such risks
as remote. The bonds are also exposed to the risk of declines in
the rate payer base in the service area of EGSL. However,
it would require dramatic declines in the rate payer base to impact the
rating of the bonds. We view the likelihood of such dramatic declines
as remote. Therefore, the parameter loss sensitivity analysis
is not presented for this transaction.
Parameter Sensitivities are not intended to measure how the rating of
the security might migrate over time, rather they are designed to
provide a quantitative calculation of how the initial rating might change
if key input parameters used in the initial rating process differed.
The analysis assumes that the deal has not aged. Parameter Sensitivities
only reflect the ratings impact of each scenario from a quantitative/model-indicated
standpoint. Qualitative factors are also taken into consideration
in the ratings process, so the actual ratings that would be assigned
in each case could vary from the information presented in the Parameter
PRINCIPAL RATING METHODOLOGY
The primary asset backing the notes is an intangible property created
by the State of Louisiana legislation and specifically authorized by an
irrevocable financing order issued by the LPSC. The state statutes
provide a state pledge that the state will not take any action that might
impair the interest of the bondholders. The financing order issued
by the LPSC is irrevocable, and cannot be repealed once the statutory
appeal period has passed. The financing order authorizes a surcharge
on the customer's bill to pay debt service on the bonds. It also
stipulates that the surcharges are nonbypassable, meaning that any
user of electricity in the utility' service area subject to LPSC jurisdiction
must pay this surcharge with very limited exceptions.
The credit enhancement to the transaction mainly consists of a true-up
or adjustment mechanism stipulated in the financing order, which
entitles the servicer to adjust the surcharge periodically in order to
pay the required interest and scheduled principal payments. The
periodic adjustments include mandatory semi-annual adjustments
as well as non-routine adjustments which might become necessary
if there are unexpected declines in electricity consumption which might
cause a shortfall for the scheduled debt service. If the bond is
not paid off by the expected final maturity date, then more frequent
adjustments such as quarterly adjustments will be allowed. Both
semi-annual and interim true-ups are reviewed by the LPSC
to confirm mathematical accuracy of the adjustments.
While the bonds are subject to political, regulatory and legal risks,
we view such risks as remote. The bonds are also exposed to the
risk of declines in the rate payer base in the servicer area of EGSL.
However, it would require dramatic declines in the EGSL ratepayer
base to impact the rating of the bonds. We view the likelihood
of such dramatic declines as remote.
The special report, "Updated Report on V Scores and Parameter Sensitivities
for Structured Finance Securities" is available on moodys.com.
Additional research, including the pre-sale report for this
transaction and reports for prior transactions, are available at
www.moodys.com. In addition, Moody's publishes
a weekly summary of structured finance credit, ratings and methodologies,
available to all registered users of our website, at www.moodys.com/SFQuickCheck.
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
Moody's assigns (P) Aaa provisional rating to LCDA system restoration bonds to be serviced by Entergy
No Related Data.
© 2018 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. 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 SUCH 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 appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. 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. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.
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 appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.