Moody's may lower Entergy Gulf States

Moody's Investors Service said it placed the debt ratings of Entergy Gulf States, Inc. under review for possible downgrade, including the Baa3 senior secured, Ba1 senior unsecured and Ba3 preferred stock.

The ratings of parent Entergy Corp. are unaffected.

Moody's said the review of the ratings of Entergy Gulf States reflects the extensive damage that Hurricane Rita caused to the utility transmission system, distribution system and power plants.

The agency added the extent of damage appears to be among the worst experienced by any investor-owned utility as a result of a hurricane in recent times.

The review will focus on the severity of the damage to the utility's infrastructure, the speed of the restoration process, the ultimate cost of recovery, the availability of insurance proceeds and the ability of the utility to recover its costs in a timely manner through rate filings or other regulatory mechanisms in Texas and Louisiana, Moody's said.

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