Moody's ups some DPL ratings

Moody's Investors Service said it upgraded DPL Inc.'s senior unsecured debt to Ba2 from Ba3 and upgraded The Dayton Power and Light Co.'s senior secured debt to Baa2 from Baa3; senior unsecured debt and issuer rating to Baa3 from Ba1; preferred stock to Ba2 from Ba3; and short-term rating for commercial paper to Prime-3 from Not Prime. Moody's also upgraded the trust preferred securities issued by DPL Capital Trust II to Ba3 from B1.

The ratings of DPL, DP&L, and DPL Capital Trust II remain on review for possible upgrade.

Moody's said the upgrades are prompted by 1) DPL's recent announcement that it had agreed to sell its private equity portfolio, which Moody's believes will reduce business risk and enhance transparency; 2) DPL's improved liquidity profile and the expected increase in its funds from operations in 2005; 3) the utility's renewed access to its $100 million bank revolver, which had been precluded while its financial statements were delayed; 4) the new management team's announced intention to execute a "back to basics" strategy and focus on its core utility business; 5) initial actions by management to resolve internal control and corporate governance issues that were raised by the DPL's controller and its external auditor.

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