Fitch Rates JEA's (Florida) $125.260MM Electric System Sub Rev Bonds 'AA-'

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has assigned an 'AA-' rating to JEA's $125.260 million electric system subordinated revenue bonds series 2009A. The bonds are expected to price the week of Jan. 12, 2009 and will finance a portion of JEA's capital plan. In addition, Fitch has affirmed the following outstanding ratings for JEA:

--Senior electric system revenue bonds at 'AA-';

--Subordinate electric system revenue bonds at 'AA-';

--St. John's River Power Park bonds at 'AA-';

--Bulk Power Supply System Scherer 4 Project revenue bonds at 'AA-';

--Series B taxable commercial paper notes at 'F1+';

--Series C tax-exempt commercial paper notes at 'F1+'.

The Rating Outlook is Stable.

JEA also plans to amend its indenture to adjust the calculation of the debt service reserve fund for senior lien bonds. For variable-rate senior lien debt that has been swapped to a synthetic fixed rate, JEA proposes to calculate the reserve requirement based upon the synthetic fixed rate or the certified rate established at bond issuance. There is no debt service reserve fund for subordinate lien bonds.

Support for the 'AA-' rating and Stable Outlook reflects JEA's above average credit characteristics, including:

--Strong management practices;

--Efficient generating portfolio;

--Competitive retail electric rates;

--Diverse and economically sound customer base;

--Solid financial performance and liquidity.

The following credit drivers could affect JEA's rating:

--A number of standby bond purchase agreements expire over the next six months, thus JEA's challenge is to manage risks associated with extending or replacing existing liquidity facilities in this uncertain market. JEA's decisions could affect its liquidity position, borrowing cost, and debt structure.

--Maintenance of financial metrics (debt service coverage and liquidity) consistent with the 'AA-' rating, given fuel cost pressures, Florida's economic challenges, and payments to the city of Jacksonville;

--Ability to recover fuel costs in a timely manner and replenish the rate stabilization fund;

--Implementation of a large capital plan ($1.7 billion) funded from a balance of debt and cash.

JEA is an integrated utility providing electric and water service within the city of Jacksonville, FL, and surrounding portions of three neighboring counties. JEA serves over 414,000 electric customers, and is one of the largest public power systems in the United States, with 3,300 megawatts (MW) of net generating capacity.

For a full review of the credit profile of JEA's electric system, please see Fitch's Sept. 9, 2008 report titled JEA (FL) Electric Utility System, available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.