(The following statement was released by the ratings agency)
April 1 - Fitch has assigned a 'BBB' rating to the anticipated $250 million
issuance of Avista Corporation (AVA.N) (AVA) first mortgage bonds (FMBs), 5.95%
series due 2018. The Rating Outlook is Positive.
The Positive Outlook reflects AVA's recently concluded Washington general
rate case (GRC), which is expected by Fitch to result in improved earnings and
cash flow and strengthening underlying credit metrics in 2008. The ratings also
reflect lower business risk as the result of the June 30, 2007 divestiture of
AVA's energy marketing and resource management subsidiary, Avista Energy (AE),
and continued strategic focus on the core electric and gas utility business in
the Pacific Northwest. Favorable resolution of the Positive Outlook will depend
on future regulatory developments and their impact on Fitch's earnings and cash
flow expectations, among other things.
The ratings and Outlook also consider regulatory mechanisms in Washington
and Idaho that allow the utility to defer certain power supply costs for future
recovery, reducing, but not eliminating, commodity cost exposure. For further
information please refer to the Avista Corporation credit update report and
press release dated Feb. 6 and 13, 2008, respectively, available on the Fitch
Ratings web site at 'www.fitchratings.com'.
AVA
