Fitch puts TNP on watch

Fitch Ratings said it has placed the ratings of TNP Enterprises Inc. and Texas-New Mexico Power Co. on Rating Watch negative following the issuance of an administrative law judge proposed order on Texas-New Mexico Power's stranded cost recovery filing.

Texas-New Mexico Power had requested recovery of $266 million in stranded costs in accordance with Texas' restructuring law, Senate Bill 7. The proposed decision acknowledges stranded costs of $137 million and may be reduced further.

If the Public Utilities Commission of Texas were to issue an order consistent with the ALJ proposal, such an order would be more negative than anticipated within the current ratings.

Ratings affected include TNP Enterprises Inc.'s senior secured bank facility at BB, senior subordinated notes at BB-, preferred stock at B+, and Texas-New Mexico Power Co.'s senior unsecured notes at BB+.

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