TEXT-Fitch: U.S. utilities maintain an insatiable thirst for financing

Sept 25 - U.S. utilities face large external funding needs to complete
infrastructure investments which may total approximately $200 billion over the
next few years, according to a new Fitch Ratings report. Fortunately, the
capital markets provide an accommodative environment with utilities enjoying
strong access to both the debt and equity markets. As a capital intensive
industry, record low interest rates reduce the development and carrying costs of
such investment, and utilities enjoy strong equity valuations reducing the
dilutive effects of raising equity.

The utility industry, while historically free cash flow negative, is in the
midst of a capital investment cycle which will further stress cash flows.
However, the credit risks associated with such a large build-out are manageable
within existing ratings as favorable capital market conditions exist and
regulatory preauthorized rate base and financing orders are obtained.

Fitch believes utilities have strong liquidity despite the capital intensive of
the industry which results in it being free cash flow negative. Utilities have
strong capital markets access in even troubled times and attract capital across
a broad spectrum of investors and financing channels. Utilities exhibit robust
capital structures including secured debt with first mortgage bonds or
project-level debt, tax-free debt, and private placements.

The full report 'U.S. Utilities: Insatiable Thirst for Financing' is available
at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: U.S. Utilities: Insatiable Thirst for
Financing