Fitch Downgrades Two Gas Pre-pay Transactions

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NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has downgraded two prepaid gas transactions as follows:

--SA Energy Acquisition Public Facility Corporation, gas supply revenue bonds, series 2007 to 'A' from 'A+';

--Tennessee Energy Acquisition Corporation, gas project revenue bonds, series 2006A to 'A' from 'A+'.

The rating action follows the downgrade by Fitch of the Goldman Sachs Group (GSG) to 'A' with a Stable Outlook from 'A+' on Rating Watch Negative.

The Outlook on the pre-pay transactions is Stable.

The long-term ratings and Outlooks on the above prepaid gas bonds are determined by Fitch's assessment of the weakest link in the transaction structure and the entities involved in the transaction, including GSG, the gas supplier guarantor. In each transaction, bond proceeds were used to fund the prepayment of natural gas supplies between the issuer and J. Aron & Co (the gas supplier).

WHAT COULD TRIGGER A RATING ACTION

Change in Counterparty Ratings: The long-term rating on the bonds will also 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:

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

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

--'Tennessee Energy Acquisition Corp', dated Feb 13, 2009;

--'SA Energy Acquisition Public Facility Corporation, TX', dated June 13, 2007.

Applicable Criteria and Related Research:

Criteria for Rating Prepaid Energy Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648406

Prepay Gas Transactions: Focus on Counterparty Risk

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

Tennessee Energy Acquisition Corporation 2006A and B

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=425798

SA Energy Acquisition Public Facility Corporation, Texas

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=328952

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 RatingsPrimary AnalystBhala Mehendale, +1-212-908-0520DirectorFitch, Inc.One State Street PlazaNew York, NY 10004orSecondary AnalystMike Murad, +1-212-908-0757Associate DirectororCommittee ChairpersonDennis Pidherny, +1-212-908-0738Senior DirectororMedia Relations:Sandro Scenga, +1-212-908-0278Email: [email protected]

Source: Fitch Ratings

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