Fitch lowers DPL to junk

Fitch Ratings said it has lowered DPL Inc.'s senior unsecured debt rating to BB from BBB- and first mortgage bond rating of utility subsidiary The Dayton Power & Light Co. to BBB from A-.

All ratings remain on negative watch.

Fitch said the downgrade follows DPL's announcement of a further delay in filing its 10-K and resulting constraints upon corporate liquidity.

The inability to file certified financial statements in a timely manner represents an event of default under DPL's $150 million term loan and $150 million revolving credit facilities. There are no drawings under either facility. The company has obtained waivers from its lenders that extend through May 31, 2004 that enable DPL to maintain the existing borrowing terms and to access the credit facilities if the 10-K is filed within the waiver period.

DPL is also in non-compliance with its other debt agreements, but in each case has a grace period that generally ranges from 60 days to 90 days to remedy the event of non-compliance. Failure to file certified financial statements by the end of the grace period would most likely result in further negative rating actions, the agency concluded.

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