S&P rates TXU debt BBB-

Standard & Poor's said it assigned its BBB- rating to TXU Corp.'s (BBB/negative/--) $3.5 billion senior unsecured debt. S&P also affirmed its BBB corporate credit rating on TXU following a review of the company's long-term financial plan. The outlook is negative.

Proceeds will be used to repurchase stock and debt completing the realignment of the capital structure following asset sales totaling $6.5 billion.

By the end of 2005, S&P said funds from operations coverage interest is expected to be around 3.5x, significantly above the 2.5x level at the end of 2003, and cash flow is expected to be around 17% of adjusted debt, compared with only 11% at the end of 2003.

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