STANDARD &PO OR"S RATINGS SERVICES RatingsDirect® Summary: Chattanooga, Tennessee; Retail Electric Primary Credit Analyst: Judith G Waite, New York ( 1) 212-438-7677;
[email protected] Secondary Contact: Theodore A Chapman, Dallas ( 1) 214-871-1401;
[email protected] Table Of Contents Rationale Outlook Related Criteria And Research WWW.STANDARDAlfDPOORS.COM/RATINOSDIRECT OCTOBER 10, 2012 1 Exhibit 6 to EPB Petition Pursuant to Section 706 of the Telecommunications Act of 199&021749 1 300000519 October 10, 2012 Standard and Poor's Ratings Upgrade - Page 1 Summary: Chattanooga, Tennessee; Retail Electric Credit Profile Chattanooga retail elec Long Term Rating M+/Stable Upgraded Chattanooga (Chattanooga Blee Pwr Brd) Unenhanced Rating M+(SPUR)/Stable Upgraded Many issues are enhanced by bond insurance. Rationale Standard & Poor's Ratings Services has raised its rating on the City of Chattanooga (EPB). Tenn's electric system revenue bonds to 'AA+' from 'AA'. The outlook is stable. At fiscal year-end 2012 (June 30), the utility had $287.5 million of debt outstanding. A net revenue pledge of the electric system secures the bonds. The higher rating reflects both our assessment of the utility's strong credit metrics in fiscal 2012 and our view that the stronger metrics are sustainable, based on our opinion that management's forecast assumptions are reasonable. In 2008, EPB issued $220 million of revenue bonds, ofwhlch $169 million funded the completion ofa fiber optic network. Initially, the fiber network was to be for infrastructure interconnectivity purposes, which allows for more automation, demand-side management, and operating savings. Now, the network also provides Internet, phone, and video service.