Fitch to Affirm Los Angeles (CA) Dept. of Water & Power $200MM CP Notes at 'F1+'

NEW YORK--()--On the effective date of July 1, 2016, Fitch Ratings will affirm the short-term rating at 'F1+' assigned to the $200,000,000 Department of Water and Power of the City of Los Angeles, CA power system revenue commercial paper notes (notes). A maximum of $200,000,000 aggregate principal amount of authorized notes may be outstanding at any given time.

The rating action is in connection with (i) the substitution of the current revolving credit agreement (RCA) provided by Wells Fargo Bank, National Association (rated 'AA/F1+', Stable Outlook) which currently supports the notes, with a RCA to be provided by Royal Bank of Canada, (Royal Bank; rated 'AA/F1+', Negative Outlook) and (ii) the reoffering of the notes.

KEY RATING DRIVERS

On the effective date, the 'F1+' rating on the notes will be affirmed based on the support provided by a RCA to be provided by Royal Bank which has a stated expiration date of June 28, 2019, unless extended or earlier terminated. The Royal Bank substitute RCA covers principal only. The Department of Water and Power of the City of Los Angeles remains obligated to pay interest upon maturity of all notes. Fitch currently rates power system revenue obligations of the Department of Water and Power of the City of Los Angeles 'AA-', Positive Outlook (see new issue report dated May 4, 2016, available at www.fitchratings.com)

U.S. Bank, National Association will continue as the Issuing and Paying Agent (IPA) for the notes, and as IPA, is directed to request an advance under the substitute RCA whenever proceeds of the sale of rollover notes and department monies are insufficient to pay principal of maturing notes.

All notes will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the RCA, Royal Bank may direct the IPA to immediately stop the issuance of any additional notes. In such event, the substitute RCA will expire after all the notes supported by such RCA mature and have been paid from funds drawn on the substitute RCA. In addition, the RCA may be terminated at Royal Bank of Canada's option upon the occurrence of specified immediate termination events related to the credit of the issuer. The dealers for the notes are J.P. Morgan Securities Inc. and Ramirez & Co., Inc.

RATING SENSITIVITIES

The rating reflects the short-term rating that Fitch maintains on the substitute bank providing liquidity support and will be adjusted upward or downward in conjunction with changes to the short-term rating of the bank and in some cases, the long-term rating of Department of Water and Power of the City of Los Angeles.

Additional information is available at www.fitchratings.com.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Linda Friedman
Senior Director
+1-212-908-0727
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Richard Park
Director
+1-212-908-0289
or
Committee Chairperson
Joseph Staffa
Senior Director
+1-212-908-0829
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Linda Friedman
Senior Director
+1-212-908-0727
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Richard Park
Director
+1-212-908-0289
or
Committee Chairperson
Joseph Staffa
Senior Director
+1-212-908-0829
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com