Fitch affirms Ameren

Fitch Ratings said it affirmed and removed Ameren Corp.'s ratings, issuer default BBB+, from Rating Watch negative following an announcement that the Illinois legislature, the state's utilities and power suppliers reached an agreement concerning the procurement and recovery of power purchase costs.

The outlook is stable.

Fitch revised the Rating Watch on four of Ameren's Illinois subsidiaries to positive from negative. Central Illinois Light Co., Cilcorp Inc., Central Illinois Public Service Co. and Illinois Power Co. all have issuer default ratings of BB+.

AmerenCIPS, AmerenCilco and AmerenIP are rated senior secured BBB, senior unsecured BBB-, preferred stock BB+ and short-term issuer default B. Cilcorp is rated senior unsecured BB+ and short-term issuer default B.

The rate agreement cuts the threat of a rate freeze and rollback of rates to 2006 levels or a generation tax and ensures some of the companies' ability to recover future power supply costs through a new procurement process, the agency said.

The stable outlook assumes that the Illinois subsidiaries, which are expected to account for roughly 40% of consolidated EBITDA, can contribute to paying shareholder dividends and parent company debt, Moody's said.

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