Fitch: Debt Ceiling, Energy Declines Pose Little Threat to U.S. Utility Tariff ABS

CHICAGO--()--Stable performance on Fitch-rated U.S. utility tariff ABS will stay the course despite sector-specific broader macroeconomic challenges, according to Fitch Ratings in a new report.

'Energy consumption may begin to decline as residential energy efficiency programs mature, thus dragging down overall electric sales,' said Senior Director Du Trieu. The tepid economic recovery may also be a factor, more so amid the resolution of the U.S. debt ceiling. These developments are likely to lead to declines in commercial and industrial loads and collection timing curves lengthening.

That said, Fitch does not envision negative rating actions for utility tariff ABS this year. Fitch recently reviewed its entire portfolio of utility tariff ABS (36 transactions in total), all of which are performing well within expectations.

The presence of true-ups and subaccount withdrawals have and will continue to keep these bonds largely immune to outside macro pressures. 'The remote likelihood of widespread utility downgrades will also help reinforce the stability of utility tariff ABS,' said Trieu.

Fitch's report 'Outlook and Performance Review for U.S. Utility Tariff ABS' is available at www.fitchratings.com or by clicking on the above link.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research: Outlook and Performance Review for U.S. Utility Tariff ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=699779

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Contacts

Fitch Ratings
Du Trieu, +1-312-368-2091
Senior Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
John Bella, +1-212-908-0243
Managing Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Du Trieu, +1-312-368-2091
Senior Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
John Bella, +1-212-908-0243
Managing Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com