Fitch Rates NYSERDA — New York — $126MM Facilities Revs, Series 2005A, 'AA+/F1+'

Business Wire, May 20, 2005

NEW YORK -- Fitch Ratings assigns a rating of 'AA /F1 ' to the $126,300,000 New York State Energy Research and Development Authority (NYSERDA), facilities revenue bonds, series 2005A (Consolidated Edison Company of New York, Inc. project). The long-term 'AA ' rating is based jointly on Consolidated Edison Company of New York, Inc (Con Ed: currently rated 'A ' by Fitch) and the support provided by an irrevocable letter of credit (LOC) issued by Wachovia Bank, National Association (the bank; currently rated 'AA-/F1 ' by Fitch) securing the bonds. The short-term rating 'F1 ' is based solely on the LOC. The long-term 'AA ' rating is based on Fitch's methodology that considers the joint probability of the failure of both a rated obligor and a bank LOC provider. The methodology results in a rating that is two notches higher than the stronger of the two credits if the following conditions are met: both entities have a rating of 'A' or higher; the transaction is structured such that payments from both the municipal issuer and the bank are in the flow of funds and both entities would have to fail to perform before the bonds defaulted; and the credit of the bank and the rated obligor have a low degree of correlation. If either Con Ed or the bank were downgraded to 'A-' or lower, the long-term rating assigned to the bonds would drop to that of the higher rated entity.

The bonds will be issued as three subseries: $42,100,000 subseries 2005A-1; $42,100,000 subseries 2005A-2; and $42,100,000 subseries 2005A-3. The bank is obligated to make payments of principal of and interest upon maturity, acceleration, and redemption, as well as the purchase price for tendered bonds. The rating will expire upon the earliest of: May 26, 2010, the stated expiration date of the LOC, unless such date is extended; any prior termination of the LOC; and defeasance of the bonds. The LOC provides full coverage of principal plus an amount equal to 45 days' interest at a maximum rate of 10% based on a 365-day year and purchase price for tendered bonds. The Bank of New York is the trustee, registrar, and paying agent for the bond issue. The remarketing agent for the subseries 2005A-1 bonds is Citigroup Global Markets Inc. J.P. Morgan Securities, Inc. will serve as remarketing agent for the subseries 2005A-2 bonds and Morgan Stanley & Co. Incorporated will serve as remarketing agent for the subseries 2005A-3. The bonds are expected to be delivered on or about May 26, 2005.

The bonds initially will bear interest at the weekly interest rate but may be converted to a daily, monthly, commercial paper, auction, semi-annual, or term or fixed interest rate. While bonds bear interest in the weekly mode, interest payments will be made on the first business day of each month, commencing June 1, 2005. While bonds are in the weekly mode, bondholders may tender their bonds on any business day with seven days prior notice of the purchase. The bonds are subject to mandatory tender upon interest mode conversion dates and upon substitution, expiration, or termination of the LOC. Optional and mandatory redemption provisions also apply to the bonds.

Bond proceeds will be used to pay for the redemption price of prior bonds.