Moody's may lower some energy bonds

Moody's Investors Service said it placed the ratings of multiple gas prepayment bonds on watch for possible downgrade as the result of the downgrade of MBIA's financial strength rating to A2 from Aaa.

MBIA is a participant in each of the transactions as provider of either a guaranteed investment contract or a surety bond.

All the bonds are currently rated Aa3 by Moody's. Affected issues include $307 million 2007A AMP-Ohio electricity purchase revenue bonds, $502 million Central Plains Energy Project gas project revenue bonds, $758 million Northern California Gas Authority No. 1 series 2007A and 2007B gas revenue bonds, $504 million series 2007 Southern California Public Power Authority gas project revenue bonds and $1.9 billion series 2006A and $1 billion series 2006C Tennessee Energy Acquisition Corp. gas project revenue bonds.

In the Central Plains Energy transaction and the Tennessee Energy Acquisition series 2006A transaction, MBIA provides a guaranteed investment contract. The other transactions are supported by surety bonds provided by MBIA.

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