Fitch Rates Toledo Edison's $300MM Senior Notes 'BB+'; Outlook Positive

Business Wire, Nov 17, 2006

NEW YORK -- Fitch Ratings has assigned a 'BB ' rating to Toledo Edison Company's (TE) $300 million 6.15% senior unsecured notes due 2037. The Rating Outlook is Positive. Proceeds from the debt offering are expected to be used to redeem all of TE's outstanding preferred stock, a portion of TE's common stock from its corporate parent, FirstEnergy Corp (FE; Issuer Default Rating [IDR] 'BBB-' with a Positive Rating Outlook by Fitch), and for general corporate purposes.

The ratings and Positive Outlook reflect TE's relatively stable operating cash flows, a balanced Ohio regulatory environment and assumes that the utility's credit metrics will remain supportive of current or higher credit ratings upon completion of the financial restructuring currently underway at the FE family of companies. In addition, the ratings consider the January 2006 approval of TE's rate certainty plan by the Public Utilities Commission of Ohio. Fitch also considers the effect of certain joint and several obligations with affiliate Cleveland Electric Illuminating Company (IDR 'BB' with a Positive Outlook) and anticipates continued reasonable regulatory outcomes in Ohio. TE's rate certainty plan and supply contract with FES substantially mitigates its power supply cost exposure, in Fitch's opinion.

The primary concern for TE fixed income investors is the uncertain outlook for development of effective post-2008 Ohio power supply markets and the potential erosion of political support for recovery of prudently incurred costs in a high and rising commodity cost environment.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.