Moody's warns it may cut ratings of Long Island Power Authority

Mon Dec 10, 2012 6:31pm EST

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Dec 10 (Reuters) - Moody's Investors Service said on Monday that it could cut its ratings on about $7 billion of debt issued by the Long Island Power Authority because key officials quit after Superstorm Sandy.

Power outages and criticism dogged the authority, which supplies electricity to Long Island, after the storm ravaged the U.S. East Coast.

LIPA's chairman, CEO and three trustees all resigned in the wake of the storm, leaving it with "the bare minimum number of trustees needed to take action, and a potential vacuum of leadership at this most critical juncture," Moody's said in a statement.

In putting LIPA on watch for a downgrade, Moody's action includes the A3 rating on about $6 billion senior lien Electric System Revenue Bonds, the Baa1 rating on $550 million subordinate lien revenue bonds, and the Baa2 rating on approximately $155 million third lien New York State Energy Research and Development Authority bonds.

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