Fitch Affirms 3 Classes of CenterPoint Energy Transition Bond Company IV

NEW YORK--()--As part of its ongoing surveillance, Fitch Ratings has affirmed 3 classes of the CenterPoint Energy Transition Bond Company IV transaction as follows:

CenterPoint Energy Transition Bond Company IV, LLC

--Class A-1 at 'AAAsf'; Outlook Stable;

--Class A-2 at 'AAAsf'; Outlook Stable;

--Class A-3 at 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

The transaction is performing within expectations, with levels of outstanding principal amounts in-line with the targeted amortization schedules. The true-up mechanism in the transaction is performing as expected, providing adequate credit support for all outstanding classes.

RATING SENSITIVITY

As part of Fitch's initial rating sensitivity, Fitch conducted a break the bond case which provides an alternative means by which to measure the potential effects of rapid, significant declines in power consumption while capping the residential securitization charges at 20% of the total customer bill. This analysis determines the maximum level of forecasted energy decline that would cause a default in required payments on the securitizations or cause the tariff charges to exceed 20% of the total residual customer bill. Despite this severe decline in consumption, due to the true-up mechanisms, the tariff charges are able to pay all debt service by the legal final maturity date.

For further detail on the rating sensitivity analysis for Utility Tariff Bonds, please refer to Fitch's criteria titled Rating Criteria for U.S. Utility Tariff Bonds available at 'www.fitchratings.com'.

Fitch's analysis of the Representation and Warranties (R&W) of this transaction can be found in ' CenterPoint Energy Transition Bond Company IV, LLC'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in the Global Structured Finance Transactions' dated April 17, 2012.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' May 24, 2013;

--'CenterPoint Energy Transition Bond Company IV, LLC 2012 Senior Secured Transition Bonds (US ABS)' Jan. 5, 2012;

--'CenterPoint Energy Transition Bond Company IV, LLC 2012 Senior Secured Transition Bonds - Appendix' Jan. 5, 2012;

--'Rating Criteria for U.S. Utility Tariff Bonds' Dec. 20, 2012.

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

CenterPoint Energy Transition Bond Company IV, LLC 2012 Senior Secured Transition Bonds (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=665650

CenterPoint Energy Transition Bond Company IV, LLC 2012 Senior Secured Transition Bonds -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=665756

Rating Criteria for U.S. Utility Tariff Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=697265

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=811651

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Contacts

Fitch Ratings
Primary Analyst
Eugene Kushnir, +1-212-908-0830
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 60602
or
Committee Chairperson
Bradley Sohl, +1-212-908-0792
Senior Director
or
Media Relations:
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Eugene Kushnir, +1-212-908-0830
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 60602
or
Committee Chairperson
Bradley Sohl, +1-212-908-0792
Senior Director
or
Media Relations:
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com