Fitch rates Dynegy loan B+

Fitch Ratings said it has assigned a B+ rating to Dynegy Holdings Inc.'s new $1.3 billion senior secured credit facilities, which consist of a $600 million six-year senior secured term loan B and a $700 million three-year senior secured revolver.

The credit facilities refinance Dynegy's B+ rated $1.1 billion senior secured revolving credit facility that was scheduled to mature in February 2005 and the Alpha credit facility.

The outlook remains positive.

Fitch said the positive outlook reflects the improved liquidity, financial flexibility, and reduced borrowing cost provided by the new credit facilities. It also considers the proposed sale of IP and several completed transactions that have had the net effect of reducing debt, extending debt maturities, and lowering near-term default risk.

Proceeds from the term loan component of the new facility will be used repay the $169 million Alpha credit facility and for collateral requirements with counterparties, with the remainder available for general corporate purposes, including potentially reducing the remaining tolling obligations and resolving certain outstanding litigation.

Fitch rates Dynegy Inc.'s indicative senior unsecured debt CCC+ and convertible debentures CCC+; Dynegy Holdings' secured revolving credit facility and term loan B at B+, second priority secured notes at B, and senior unsecured debt at CCC+; Dynegy Capital Trust I's trust preferred stock at CC; Illinois Power Co.'s senior secured debt and pollution control bonds at B, indicative senior unsecured debt at CCC+, and preferred stock at CC; and Illinova Corp.'s indicative senior unsecured debt at CCC+.

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