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Fitch affirms TXU ratings
After reviewing the credit ratings of all of the companies within the TXU group, Fitch Ratings said it has raised the short-term rating for TXU Energy LLC to F2 from F3 and affirmed the other ratings of TXU Corp and its subsidiaries.
Among the ratings affirmed are the senior notes of TXU Corp. and TXU U.S. Holdings, both at BBB-.
The outlook is stable for TXU and its US subsidiaries and positive for TXU Australia Holdings (Partnership) LP.
Fitch said TXU Corp benefits from the strong earning and cash flow it receives from its regulated and non-regulated electric and gas operations in Texas. On a consolidated basis, TXU's leverage remains high for the ratings category with debt-to-EBITDA at 4.9 times for the 12 months ended Sept. 30.
Leverage is expected to decline as TXU's Oncor Electric Delivery will use the proceeds from the issuance of $800 million in stranded asset securitization bonds in 2004 to pay down corporate debt. TXU is evaluating a partial initial public offering of TXU Australia. If the company decides to proceed, it is expected that the proceeds would be used to reduce leverage.
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