Fitch puts CMS on positive watch

Fitch Ratings said it placed the ratings of CMS Energy Corp. and its subsidiary Consumers Energy Co. on Rating Watch positive following the announcement that CMS has agreed to sell the international assets of its subsidiary CMS Generation Co. to Abu Dhabi National Energy Co. for $900 million, including the assumption of $104 million of debt.

Ratings on watch include CMS Energy's B+ issuer default rating, BB+/RR1 senior secured bank loan, BB-/RR3 senior unsecured debt rating and B- preferred stock; Consumers Energy's BB- issuer default rating, BBB- senior secured debt, BB+ senior secured second-lien bank credit facility, BB senior unsecured debt rating and BB- preferred stock; CMS Energy Trust I's B-/RR6 preferred stock and Consumers Energy Financing I's BB- preferred stock.

Assuming all necessary consents are received, the sale is expected to be completed in the middle of 2007. Proceeds from the transaction will be used to retire $550 million of CMS debt and for general corporate purposes, including a $350 million investment in Consumers.

Fitch said it views the sale, in conjunction with the recent sale of several assets in Latin America, as favorable for credit quality. While CMS will no longer benefit from the cash distributions and earnings from the assets, the agency said consolidated business risk would be significantly lowered as a result of the transaction.

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