Fitch Rates System Energy Resources' First Mortgage Bonds 'BBB-'

Business Wire, Sept 27, 2007

CHICAGO -- Fitch Ratings assigns a 'BBB-' rating to System Energy Resources, Inc.'s (SERI) $70 million issuance of 6.20% first mortgage bonds due 2012. The Rating Outlook is Stable. The proceeds will be used to redeem $70 million of first mortgage bonds maturing on Oct. 1, 2007.

SERI's ratings are supported principally by the obligations of affiliated utilities under various agreements to pay the operating and capital costs associated with SERI's sole asset, its 90% ownership and leasehold interest in the Grand Gulf Unit 1 nuclear facility. SERI bondholders benefit from an assignment of the rights to receive payments under the agreements from Entergy Arkansas, Inc. (36%), Entergy Louisiana, LLC (14%), Entergy Mississippi, Inc. (33%), and Entergy New Orleans, Inc. (17%). The utilities are required to pay for energy and capacity on a full cost-of-service basis regardless of the quantity of energy delivered. SERI's parent, Entergy Corp. also provides support through an agreement under which it is required to supply sufficient funds to maintain SERI's equity capital at 35% of capitalization, to continue the commercial operation of Grand Gulf 1, and to pay its debt when due. The ratings also consider SERI's strong nuclear operating history and improving financial measures.

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.