Fitch Affirms Two CenterPoint U.S. Utility Tariff Bond Transactions

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed two CenterPoint U.S. utility tariff bond transactions as follows:

CenterPoint Energy Restoration Bond Company, LLC 2009

-- Class A-2 at 'AAAsf'; Outlook Stable;

-- Class A-3 at 'AAAsf'; Outlook Stable.

CenterPoint Energy Transition Bond Company II, LLC Series A

-- Class A-4 at 'AAAsf'; Outlook Stable;

-- Class A-5 at 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

The transactions are performing within expectations, with levels of outstanding principal amounts in-line with the targeted amortization schedules. The true-up mechanism is performing as expected, providing adequate credit support for all outstanding classes.

RATING SENSITIVITIES

As part of Fitch's initial rating sensitivity, Fitch conducted a break the bond case which provides an alternative means by which to measure the potential effects of rapid, significant declines in power consumption while capping the residential securitization charges at 20% of the total customer bill. This analysis determines the maximum level of forecasted energy decline that would cause a default in required payments on the securitizations or cause the tariff charges to exceed 20% of the total residual customer bill. Despite this severe decline in consumption, due to the true-up mechanisms, the tariff charges are able to pay all debt service by the legal final maturity date.

For further detail on the rating sensitivity analysis for Utility Tariff Bonds, please refer to Fitch's criteria titled Rating Criteria for U.S. Utility Tariff Bonds available at 'www.fitchratings.com'.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to these rating actions.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875586

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Rating Criteria for U.S. Utility Tariff Bonds (pub. 21 Dec 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875393

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1005448

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1005448

Endorsement Policyhttps://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160601007006/en/

Fitch Ratings, Inc.
Primary Analyst
Cole MacKenzie, +1-212-908-0830
Analyst
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Kevin Corrigan, +1-212-908-9156
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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