Fitch revises CMS Energy outlook to stable

Fitch Ratings said it has affirmed the BB- senior secured and B+ senior unsecured ratings of CMS Energy Corp. and raised to B- from CCC+ the rating of the preferred stock and trust preferred securities.

Separately, the outlook for CMS has been revised to stable from negative.

Fitch said the ratings affirmation and outlook revision follow a routine review by Fitch. CMS has been able to improve its liquidity position and financial flexibility as a result of several transactions completed in 2003. In March, the company successfully refinanced $1.465 billion of secured bank facilities, which provided CMS and its affiliates with adequate liquidity to manage operations and meet debt obligations through 2004.

Importantly, CMS and its primary subsidiary, Consumers Energy Co. (Consumers, senior unsecured debt rated BB, stable), were able to regain access to the capital markets, with a total of $1.725 billion in issuances or refinancings done since April of this year.

Also, CMS has made good progress on its asset sales program, with about $845 million of net realized cash in 2003.

The company has used proceeds from debt issuances and asset sales to pay down secured bank debt as well as near-term debt maturities, effectively extending its debt maturity schedule through 2006.

Fitch said the current ratings of CMS also recognize the relatively high levels of parent level debt and weak consolidated credit metrics. Leverage, as measured by debt to EBITDA, is forecasted to be more than 5.5x in 2003, with EBITDA to interest of about 2x.

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