HOUSTON, TX - Nov. 4, 2002 - CenterPoint Energy, Inc. (NYSE: CNP) today said that Moody's Investors Service's decision to reduce its credit ratings and the ratings of its gas distribution subsidiary from Baa2 to Ba1 will not affect the company's commitment to its ultimate goal of reducing its level of debt and increasing its financial flexibility, nor will it affect its commitment to customer service. The downgrade will result in a 50 basis point increase in the cost of the recently negotiated $4.7 billion credit facilities. The senior secured rating of the company's electric transmission and distribution subsidiary remains investment grade.
"Despite today's action by Moody's, we remain focused on effectively managing our companies as we move toward the 2004 recovery of the investment in our generating units," said David M. McClanahan, CenterPoint Energy's president and chief executive officer. In 2004 CenterPoint Energy intends to sell all of its generating assets and, under the Texas electric restructuring law, will be entitled to recover all of its stranded investment. At that time the company will reduce its debt to levels more typical for combination gas and electric utilities.
"I want to assure our customers we will continue to provide the safe and reliable service that they have come to expect from us," McClanahan added. "We remain committed to serving our customers' needs as we go through this transition and beyond."
The company continues to possess the following strong business fundamentals: