Fitch Downgrades 7 Gas Pre-pay Transactions

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NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has downgraded the rating of the following prepaid gas transactions to 'A' from 'A+':

--Long Beach Bond Financing Authority, natural gas purchase revenue bonds, series 2007A & B;

--Main Street Natural Gas, gas project revenue bonds, series 2006B and series 2007A;

--Clarksville Natural Gas Acquisition Corporation, gas revenue bonds, series 2006;

--Public Authority For Colorado Energy, natural gas purchase revenue bonds, series 2008;

--Roseville Natural Gas Financing Authority, gas revenue bonds, series 2007A.

The Outlook on all bonds is Stable.

The rating action reflects Fitch's assessment of the credit quality of the various counterparties and enhancement providers and Fitch's Dec. 15, 2011 decision to downgrade the long-term Issuer Default Rating of Merrill Lynch & Co., Inc. (ML) to 'A' from 'A+' and revise the Outlook to Stable.

Gas is supplied by Merrill Lynch Commodities Inc., whose obligations are guaranteed by ML, in each of the transactions noted above.

WHAT COULD TRIGGER A RATING ACTION

Change in Counterparty Ratings: The long-term rating on the bonds will continue to be determined by Fitch's assessment of the transaction structure, the role of the remaining counterparties in the structure, and their credit quality.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Guidelines for Rating Prepaid Energy Transactions,' dated Aug. 15, 2011;

--'Prepay Gas Transactions: Focus on Counterparty Risk,' dated Feb. 23, 2009.

Applicable Criteria and Related Research:

Prepay Gas Transactions: Focus on Counterparty Risk

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=427254

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch RatingsSandro Scenga, +1-212-908-0278Media Relations, New York[email protected]orPrimary Analyst:Dennis M. Pidherny, +1-212-908-0738Senior DirectorFitch, Inc.One State Street PlazaNew York, NY 10004orSecondary Analyst:Michael Murad, +1-212-908-0757Associate DirectororCommittee Chairperson:Alan Spen, +1-212-908-0594Senior Director

Source: Fitch Ratings

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