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.
12 Mar 2007
Approximately $5 billion of debt securities downgraded
New York, March 12, 2007 -- Moody's Investors Service downgraded the ratings of Ameren Corporation
(Ameren, Issuer Rating to Baa2 from Baa1); Union Electric Company
(d/b/a AmerenUE, Issuer Rating to Baa1 from A3); Central Illinois
Public Service Company (d/b/a AmerenCIPS; Issuer Rating to Ba1 from
Baa3); CILCORP Inc. (senior unsecured to Ba2 from Ba1);
Central Illinois Light Company's (d/b/a AmerenCILCO, Issuer
Rating to Ba1 from Baa2), and Illinois Power Company (d/b/a AmerenIP,
Issuer Rating to Ba1 from Baa3). A Corporate Family Rating (CFR)
of Ba1 and a Probability of Default Rating (PDR) of Ba1 was assigned to
CILCORP. The ratings of Ameren, Central Illinois Public Service,
CILCORP, Central Illinois Light, and Illinois Power remain
on review for possible further downgrade. Moody's placed
Ameren's Prime-2 short-term rating for commercial
paper on review for possible downgrade. The ratings of Union Electric
are no longer on review, although the rating outlook is negative.
The rating of AmerenEnergy Generating Company (Baa2 senior unsecured)
is unchanged and remains on review for possible downgrade.
The downgrade of the ratings of Ameren, Central Illinois Public
Service, CILCORP, Central Illinois Light, and Illinois
Power is prompted by the passage of rate freeze legislation by both the
Illinois House and by a committee of the Illinois Senate last week and
the growing support for a rate freeze in both chambers. On March
6, 2007, the Illinois House approved, by an overwhelming
92-5 majority, legislation supporting the roll back of electric
rates to 2006 levels and the enactment of a three year rate freeze through
2010. While rate freeze legislation had up until now not had widespread
support in the Senate and the President of the Senate had voiced his opposition
to a rate freeze, on March 8, 2007, the Senate Environment
and Energy Committee voted by a unanimous 11-0 vote to support
a bill specific to Ameren that would roll back rates to 2006 levels and
freeze rates for at least six months. This bill is likely to be
introduced into the entire Senate shortly.
"Although an acceptable rate phase-in solution may still
be possible, the increasing support for a rate freeze and the continued
political intervention in the utility regulatory process in Illinois has
increased credit risk for investors and is no longer supportive of investment
grade senior unsecured ratings", said Michael G. Haggarty,
Vice President and Senior Credit Officer. Moody's believes
that future distribution rate increase requests may be met with less constructive
responses from state regulators due to the ongoing controversy over Ameren's
relatively high rate increases. The ratings remain on review for
possible further downgrade since the passage and enactment of rate freeze
legislation could result in additional downgrades of the ratings of Ameren's
Illinois utility subsidiaries well into speculative grade.
The downgrade of the ratings of Union Electric is prompted by higher costs
at that utility, lower financial metrics, and a continued
challenging regulatory environment in Missouri, most recently illustrated
by the Missouri Public Service Commission (MPSC) staff's recommendation
that Union Electric's annual electric revenues be reduced by between
$136 and $168 million, compared to the utility's
request for a $360 million rate increase. Although the MPSC
is not expected to rule on the case until later this year and may come
to a more constructive decision than the staff recommendation, the
large differential between the staff recommendation and utility's
request makes it unlikely that AmerenUE will obtain sufficient rate relief
to maintain financial ratios consistent with its former rating category.
"The ratings downgrade reflects increased cost pressures at Union
Electric, including for environmental compliance, coal and
coal transportation costs, transmission and distribution system
and other energy infrastructure investments, and other expenses,
that are unlikely to be offset by sufficiently higher rates",
said Haggarty. The lower rating also reflects Moody's expectation
that Ameren may have to rely more on Union Electric for upstreamed dividends
if rate freeze legislation is passed and enacted in Illinois, severely
restricting dividends from the other Ameren utility subsidiaries.
The rating outlook of Union Electric is negative due to anticipated continued
cost pressures at the utility, the uncertain outcome of the utility's
pending Missouri rate case, the ongoing uncertainty with regard
to its affiliate utilities in Illinois and their ability of Ameren's
Illinois subsidiaries to provide dividends to the parent going forward.
The downgrade of parent company Ameren considers the challenging political
and regulatory environment facing the company in both of its jurisdictions
and the importance of the three Illinois utility businesses to its consolidated
financial profile. The Illinois utilities make up nearly half of
Ameren's total utility business and any material financial deterioration
of those subsidiaries is expected to severely limit upstreamed dividends
to the parent, which will increase the reliance of the parent on
Union Electric to meet parent company interest and dividend obligations.
Ratings downgraded and remaining under review for possible downgrade include:
Ameren's senior unsecured debt and Issuer Rating to Baa2 from Baa1;
Central Illinois Public Service Company's senior secured to Baa3 from
Baa2, Issuer Rating to Ba1 from Baa3, and preferred stock
to Ba3 from Ba2;
Illinois Power Company's senior secured debt to Baa3 from Baa2,
Issuer Rating to Ba1 from Baa3, and preferred stock to Ba3 from
Ratings downgraded and assigned a negative outlook include:
Union Electric Company's senior secured debt to A3 from A2,
Issuer Rating to Baa1 from A3, and preferred stock to Baa3 from
Ratings and Loss Given Default assessments for CILCORP and its subsidiary
Central Illinois Light Company have been determined in accordance with
Moody's Loss-Given Default Methodology. More information
on this methodology can be found at moodys.com/lgd.
Ratings downgraded/assessments assigned:
CILCORP, Inc.'s senior unsecured debt to Ba2 (LGD5,
80%) from Ba1;
Central Illinois Light Company's senior secured debt to Baa2 (LGD2,
13%) from Baa1; and Issuer Rating to Ba1 from Baa2;
Ratings affirmed/assessments assigned:
Central Illinois Light Company's preferred stock at Ba1 (LGD4,
CILCORP Corporate Family Rating at Ba1;
CILCORP Probability of Default Rating at Ba1;
Ratings placed under review:
Ameren's Prime-2 short-term rating for commercial
Ameren Corporation is a public utility holding company headquartered in
St. Louis, Missouri. It is the parent company of Union
Electric Company (d/b/a AmerenUE), Central Illinois Public Service
Company (d/b/a AmerenCIPS), CILCORP Inc., Central Illinois
Light Company (d/b/a AmerenCILCO), Illinois Power Company (d/b/a
AmerenIP), and AmerenEnergy Generating Company.
William L. Hess
Corporate Finance Group
Moody's Investors Service
Michael G. Haggarty
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.