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HomeMy WebLinkAboutCOC IPC_CreditOpn_June_4_2008.pdfGlobal Credit Research Credit Opinion 4 JUN 2008 Credit Opinion:Idaho Power Company Idaho Power Company Boise,Idaho,United States [1] [1]All ratios calculated in accordance with the Global Regulated Electric Utilities Rating Methodology using Moody's standard adjustments Note:For definitions of Moody's most common ratio terms please see the accompanying User's Guide. Company Profile Idaho Power Company (IPC)is a vertically integrated regulated investor-owned utility and the principal wholly- owned subsidiary of IDACORP,Inc.(IDA),a holding company which also serves as parent for other modest-sized non-utility businesses.As an all-electric utility,IPC provides retail electric service to approximately 483,000 residential,irrigation,commercial and industrial customers within a 24,000-square mile service area encompassing southwestern Idaho and eastern Oregon.The company operates a system with 4,747 miles of transmission lines and 26,394 miles of distribution lines.IPC relies heavily on hydro-electric power for its generating needs,normally generating nearly half of the electricity it sells from 17 hydro-electric developments on the Snake River and its Ratings Category Moody's Rating Outlook Negative Issuer Rating Baa1 First Mortgage Bonds A3 Senior Secured A3 Sr Unsec Bank Credit Facility Baa1 Senior Unsecured Shelf (P)Baa1 Commercial Paper P-2 Parent:IDACORP,Inc. Outlook Negative Issuer Rating Baa2 Sr Unsec Bank Credit Facility Baa2 Senior Unsecured MTN Baa2 Commercial Paper P-2 Contacts Analyst Phone Kevin G.Rose/New York 212.553.0389 William L.Hess/New York 212.553.3837 Key Indicators Idaho Power Company LTM 1Q 08 2007 2006 2005 (CFO Pre-W/C +Interest)/Interest Expense 2.3 2.4 3.3 3.4 (CFO Pre-W/C)/Debt 7%7%13%13% (CFO Pre-W/C -Dividends)/Debt 3%3%8%8% (CFO Pre-W/C -Dividends)/Capex 13%14%41%42% Debt /Book Capitalization 46%45%42%41% EBITA Margin %18%19%20%17% Opinion tributaries.IPC also serves a portion of its electric load from three coal-fired power plants in Wyoming,Nevada, and Oregon and from the natural gas-fired Bennett Mountain Power Plant,Danskin 1 Power Plant,and Evander Andrews Power Complex in Mountain Home,Idaho.IPC is the parent of Idaho Energy Resources Co.,a joint venture partner in Bridger Coal Company,which supplies coal to the Jim Bridger generating plant owned in part by IPC.The utility also buys electricity from the regional wholesale market to meet its customers'needs for electricity. On a stand-alone basis,IPC represents the substantial majority of IDACORP's consolidated revenues,net income, and assets.IPC's customers have been weighted toward the residential class,with about 46.1%of 2007 general business revenues derived from sales to residential customers,which are typically more predictable and stable sources of revenue.We do not expect this to change materially in the foreseeable future.The remainder of IPC's 2007 revenues were derived from electricity sales to commercial customers (25.4%),industrial customers (15.2%), and irrigation customers (13.3%). IPC's retail rates are subject to the regulatory jurisdiction of the Idaho Public Utilities Commission (IPUC)and the Oregon Public Utility Commission (OPUC)as it relates to rates charged to its retail customers and various financing activity.Wholesale activities and interstate activities are subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC). Recent Events Effective June 3,2008,Moody's affirmed the ratings of IDACORP,Inc.(Baa2 Issuer Rating and Prime-2 short term debt rating)and its regulated utility subsidiary,Idaho Power Company (IPC;Baa1 senior unsecured and Prime-2 short-term debt rating).At the same time,Moody's changed the rating outlook to negative from stable for both companies.See Press Release of June 3,2008 for additional commentary. Rating Rationale Key factors affecting IPC's Baa1 senior unsecured debt rating include a relatively low business risk profile and low cost structure relative to national peers within a usually generally supportive regulatory environment combined with an increasing level of capital expenditures to add generation capacity,transmission infrastructure,and address other asset maintenance to ensure meeting service safety and reliability standards.The company's recent financial metrics,including its coverage of interest and debt by cash flow from operations exclusive of working capital changes (CFO Pre-W/C),have been pressured to a level we often see for a regulated electric utility in the Ba rating category.These recent metrics are the result of unfavorable hydro conditions and the adverse effects the recent increase to the load growth adjustment rate (LGAR)has had on net power supply cost recovery under the power cost adjustment (PCA)mechanism.With respect to the latter concern,we note that the LGAR subtracts the cost of serving additional Idaho retail load from the net power supply costs that IPC is allowed to include in its annual PCA filing.We address the LGAR in more detail below;however,as IPC continues to diversify its resource portfolio and works with the IPUC to adjust or replace the current LGAR,as called for as part of the settlement of the utility's last general rate case,we are concerned about whether recent revenue increases approved by the IPUC and the OPUC,when combined with the likely implementation of further general rate increases associated with future rate filings,will be sufficient to allow IPC's cash flow coverage metrics to revert back to levels more consistent with the current rating over the next 12 to 18 months.Meanwhile,IPC's Integrated Resource Plan (IRP), and its access to sufficient liquidity are considered in line with the Baa rating category.IPC's ratings also take into account that IPC's retail rates remain below national averages,and that it is pursuing strategies to control operating expenses and conservatively finance its investments. The most important drivers of IPC's current ratings and outlook are as follows: DETERIORATION IN HYDRO CONDITIONS RAISES OPERATING CHALLENGES AND PRESSURES MARGINS During 2007,there was a return to the drought conditions that have persisted in Idaho in all but one of the last seven years.The one exception was in 2006,when there was a brief normalization of water levels.Inflows into the company's largest storage reservoir,the Brownlee Reservoir,were only 2.8 million acre feet (maf)during the critical April through July 2007 runoff period,which was about 44%of average.Although hydro conditions are somewhat better to date in 2008,they still remain below normal.The current expectations for runoff during the critical April through July period in 2008 of about 4.8 maf is still only about 76%of average.Based on this data, IPC is currently expecting to generate between 6.0 and 8.0 million megawatt hours (MWh)from its hydroelectric facilities during 2008,compared to 6.2 million MWh in 2007.The water conditions in the Snake River Basin this year have enabled IPC's hydro-electric generation to contribute about 46%of total system generation during the first quarter,compared to about 51%for the same period in 2007.When IPC experiences poor hydro-electric generating conditions,it results in a heavier dependence on typically more expensive thermal generation and purchased power,and reduces wholesale sales while increasing operations and maintenance expenses and pressuring margins. It remains to be seen whether the drought conditions that have persisted for six out of the last seven years in the U.S.Pacific northwest region may be viewed as an anomaly or as part of a larger more permanent or semi- permanent climate shift that signals the need for reduced reliance upon hydro-electric generation for a company such as IPC that has relied fairly extensively upon hydro as the primary component of its generation portfolio. Moody's ratings and negative outlook for IPC take into account these increased operating challenges. PARTIAL OFFSETS FROM POWER COST ADJUSTMENT (PCA)MECHANISM Our ratings also take into consideration the long-standing existence of a PCA mechanism in Idaho and the generally supportive outcomes in annual filings made before the IPUC.Under the terms of the PCA,IPC annually adjusts its rates charged to Idaho retail customers for 90%of the difference (with interest)between the actual and forecasted costs of fuel and purchased power less off-system sales,and the true-up of the prior year's forecast. We generally view the existence of PCA mechanisms to be beneficial to a utility's overall credit profile because such a mechanism can help minimize the negative effects on earnings and cash flow when net power supply costs unexpectedly exceed forecast levels in existing rates.This is especially so when the cash recovery period is relatively short.We note that IPC's 2008-2009 PCA filing initially requested an increase of $87.2 million to the PCA component of customers'rates.Subsequent to this request,the IPUC issued a ruling that required IPC to offset the PCA request with $16.4 million of proceeds from an earlier sale of sulfur dioxide emission allowances.As a result, it was expected that IPC's PCA rate increase,to be effective June 1,2008,would be $70.7 million (10.4%)for the 2008-2009 period.In a final PCA decision rendered May 30,2008,the IPUC made positive adjustments that brought the approved level of the PCA rate increase effective June 1,2008 to $73.3 million (10.7%). IPC HAS BEEN ACTIVE IN FILING GENERAL RATE CASES On the heels of the 3.2%general rate case settlement increase to IPC's Idaho retail base rates implemented on June 1,2006,which we generally viewed as a particularly encouraging sign of a more transparent working relationship between the IPUC and IPC,the utility filed another general rate case on June 8,2007.In the June 2007 filing,IPC sought a 10.35%rate increase ($63.9 million annually),to address recovery of and return on investments and to also compensate for higher operating costs.IPC also requested that the IPUC reduce the LGAR to $29.16 per MWh from $29.41 per MWh.As described in public filings,the significance of the LGAR is that it adjusts IPC's net power supply costs that it includes in the annual PCA filings for differences between actual load and the load used in calculating existing base rates.During periods of modest load growth and/or when there is little difference between assumed and actual load,the LGAR is a less material issue;however,in recent periods, IPC's loads have grown considerably in excess of the assumed load in setting base rates.During such periods,the marginal energy cost of serving new Idaho retail customers are subtracted from the PCA filings.In effect,IPC must wait until its next general rate case to adjust the assumed load growth.From a credit perspective,Moody's concerns increase when the IPUC increases the LGAR and/or there is a significant mismatch between the assumed and actual load growth because of the potential negative effects on IPC's earnings and cash flow under those circumstances. As the June 2007 case proceeded,the parties settled in January 2008 on an average annual 5.2%rate increase (about $32.1 million)and agreed to pursue good faith efforts to develop a mechanism to adjust or replace the current LGAR.Importantly,the general rate case settlement gave IPC an opportunity to reset the load growth assumption used in the rate process.Meanwhile,the settlement provided for use of the IPUC staff recommended LGAR of $62.79 per MWh,which would only be applied to half of the load growth in Idaho during each month within the April 2008 -March 2009 PCA year.Another important aspect of the settlement called for good faith discussion among the parties aimed at establishing acceptable terms for use of a forecast test year in future general rate cases which,if implemented,would address concerns about regulatory lag and be viewed as a credit positive.The settlement was ultimately approved by the IPUC in the form presented to them and new rates that were silent as to the allowed rate of return became effective March 1,2008.(See below for further background on future general rate case plans). OTHER REGULATORY INITIATIVES Aside from the recently concluded PCA filing and other general rate case activity in Idaho,IPC recently wrapped up a series of other proceedings in Idaho and Oregon in May 2008,which collectively will provide an additional $18.4 million of revenue under rates that took effect June 1,2008 and should contribute to a rebound in financial results.First,the IPUC approved IPC's request for a 1.4%rate increase ($9 million)to address recovery of the Danskin 1 natural gas fired plant that began commercial operation earlier this year.The IPUC also approved IPC's requested increase in its Energy Efficiency Rider to 2.5%from 1.5%.This 1%increase translates into about a $7 million annual increase in revenue that will be collected from its Idaho customers to cover the costs of various energy efficiency programs.Furthermore,IPC will make its first rate adjustment under the decoupling program in Idaho aimed at de-linking revenues from volume.The net effects of the IPUC approval of this filing results in a $2.4 million rate reduction.Lastly,the OPUC approved a $4.8 million rate increase (15.7%),representing the first rate adjustment under the recently implemented power cost adjustment mechanism in Oregon.Approval of the rate change is,however,subject to refund.We understand that the OPUC staff requested additional time to further review data since this was the initial proceeding under this mechanism and the relative amount was quite large. Nevertheless,there was a desire to implement a rate adjustment effective June 1,2008. SIGNIFICANTLY HIGHER UTILITY CAPITAL EXPENDITURES REQUIRE EXTERNAL FUNDING IPC faces significantly higher capital expenditure needs over the next few years for additions and upgrades to existing generation,transmission,and distribution infrastructure,primarily to meet customer and demand growth. IPC expects to continue financing its large utility construction program and other capital requirements (excluding new base load plant and large transmission projects),which are estimated at $900 million over the three-year period spanning 2008-2010,with internally generated funds and externally financed capital.Its internally generated cash after dividends is only expected to provide slightly more than half of its $270-$290 million estimated 2008 capital requirements.In the face of external financing needs,it is anticipated that IPC will seek to maintain capitalization ratios close to the level of March 31,2008,through periodic additional common equity infusions from its parent company. As originally articulated in IDA's 2006 Integrated Resource Plan (IRP)regulatory filing,IPC is looking to reduce its reliance on hydro,while also making investments into new transmission assets to help meet load growth and improve its operating performance/reliability.To that end,IPC signed a memorandum of understanding with PacifiCorp on May 18,2007,under which the companies will pursue the possible development of new high voltage transmission lines from Wyoming across southern Idaho,with target completion set between 2012 and 2014. Another growing component of the IRP is the exploration of potential investments into geothermal power,as evidenced by IPC's negotiations with U.S.Geothermal Inc.IPC named U.S.Geothermal as the successful bidder for 45 MW of geothermal power from the future development of U.S.Geothermal's Raft River geothermal power plant in southeastern Idaho and the initial phase of U.S.Geothermal's Neal Hot Springs project located in southeast Oregon. A notable shift in the 2006 IRP relates to a decision in April 2008 to not pursue a conventional pulverized coal-fired plant to meet a targeted capacity need in 2013,given concerns about escalating construction costs,ability to obtain requisite permits,and lingering uncertainty related to greenhouse gas laws and regulations.Instead,IPC has issued requests for proposals (RFP)for 250 to 600 megawatts of dispatchable,physically delivered or unit contingent energy to be acquired under power purchase contracts or tolling agreements.We understand that IPC will use a self-build proposal for a combined cycle natural gas combustion turbine as the benchmark to compare proposals against.Proposals are due by October 17,2008.Meanwhile,IPC plans to officially provide an update on the status of its 2006 IRP to the IPUC and the OPUC in June 2008 and then file a new IRP in June 2009. Given the magnitude of some of the aforementioned investment considerations,it is possible that IPC's capital budget over 2008 -2010 could be substantially higher than the $900 million figure cited above.To the extent that IPC moves ahead with investments into renewable and thermal energy resources,as well as transmission line expansion,that provide greater diversification of electric power sources both as to type of generation and geographic locale,Moody's would generally view those investments as a positive for IPC's credit profile,presuming the investments are financed in a conservative manner and receive supportive treatment by the utility's regulators. CONTINUING NEED FOR FURTHER GENERAL RATE CASE INCREASES AT IPC Given the forecasted capital expenditure program,in order to maintain a credit metrics profile commensurate with its current rating,it is essential that the utility receive favorable rate case increases from the Idaho and Oregon regulatory authorities in its regulatory filings.IPC's management remains focused on this objective,as evidenced by its notice of intent to file with the IPUC a general rate case on or after June 1,2008.In addition to the level of rate increase that IPC might seek,key points to focus on in the prospective case will be whether the IPUC fully embraces the forecast test year concept that evolved from work shop discussions with the IPUC staff and other interested parties earlier this year and accepts the concept of including construction work in progress,particularly as it relates to hydro plant re-licensing and other utility investments,as part of the utility rate base. Separately,we would view any progress toward reducing or eliminating the cost sharing approach under the PCA so that IPC recovers 100%of any power cost under recoveries and development of a mechanism to adjust or replace the current LGAR as credit positive steps (See above for more background on the LGAR solution as it was incorporated into IPC's general rate case settlement approved February 28,2008). RENEWED FOCUS ON CORE UTILITY OPERATIONS EMPHASIZES DESIRABILITY OF LOW BUSINESS RISK Regulatory support is all the more important as the conclusion of divestitures of non-core unregulated businesses previously owned by IDA has left IPC as the principal source of cash flows,with lesser contributions from independent power production at Ida-West Energy and affordable housing investments through IDACORP Financial Services.This renewed focus on core electric utility operations is in line with the overall corporate strategy of a decreased reliance on cash flows from riskier non-utility businesses and has placed greater emphasis on the importance of having a low business risk profile. Moody's views this back-to-basics focus as being beneficial to IPC,as it helps to ensure that no extraneous capital expenditure demands will detract from the large utility capital program set forth in the IRP.Any deviation from this strategy,such as a foray by the parent company into unregulated corporate acquisitions,would likely necessitate a higher level of scrutiny as to whether IPC's fairly ambitious capital expenditure program will continue to be rolled out without undue hindrance.We also believe that IPC will continue to benefit from IDA's renewed focus on a back- to-basics core energy-related strategy centered on its regulated utility business,insofar as management still may decide to further support IPC's capital program and bolster capitalization and cash flow coverage of debt metrics by periodic issuances of additional common equity. RECENT PRESSURE ON CASH FLOW METRICS IPC's CFO Pre-W/C for the 12-months ended March 31,2008 provided coverage of interest and debt by 2.3x and 6.8%,respectively,reflecting a continuation of weakness evidenced during fiscal 2007 and a marked decline from the 3.3x and 13%,respectively,achieved for fiscal 2006.The decline since the start of 2007 reflects PCA rate differences,less favorable hydro electric operating conditions,and the reduced sales of excess sulfur dioxide emission allowances.Although our prospective view takes into account that key credit metrics,including CFO Pre W/C to debt and interest,may rebound over the next 18 months as the full benefits of recently approved rate increases materialize,the improvement may not be sufficient to re-establish the metrics at levels consistent with what we typically observe for vertically integrated utilities at the Baa1 senior unsecured rating level.Although the sale of sulfur dioxide emission allowances had positive effects (to varying degrees)on earnings and cash flow in 2005 -2007,we do not factor in similar effects on a prospective basis. As noted above,IPC's metrics for the 12-months ended March 31,2008 are pressured relative to the current Baa1 rating and we expect that the company's financial performance will remain subject to the vagaries of water flow conditions.As a result,the adequacy and timeliness of rate relief afforded to IPC by the IPUC in likely future PCA and general rate case proceedings becomes increasingly more important,particularly in light of the higher than historical utility capital expenditures planned for the near term.Our ratings and negative outlook are intended to convey the relative importance that regulatory supportiveness plays in IPC's future credit profile.A key consideration in order for IPC to stabilize its rating outlook and maintain its Baa1 senior unsecured rating will be the extent to which the IPUC is supportive in any future regulatory filings by IPC (i.e.whether they provide supportive rate base treatment of planned utility capital spending and relatively timely recovery of net power supply costs). After considering Moody's standard adjustments,IPC has been able to maintain its overall debt leverage ratio at 45.6%as of March 31,2008,which is slightly above the three-year average of 42.6%spanning the period of 2005 to 2007.The calculation of this ratio includes deferred income taxes as part of capitalization.The adjusted debt ratio currently leaves IPC comfortably positioned relative to the range we typically observe for Baa-rated regulated electric utilities.Given the recent slight increase in IPC's debt ratio stemming from higher than historical capital spending,we see the possibility that prospective debt leverage could still creep slightly higher. Liquidity On balance,IPC has generally maintained sufficient liquidity,including cash on hand plus its unused capacity under its revolving bank credit facility.In 2007,management negotiated an increase in the amount of IPC's revolver,in order to better cover the prospective liquidity needs of the company as it undertakes a large capital program while drought conditions have resurfaced to pressure cash flow.More recently,IPC also arranged for a $170 million term loan credit agreement as of April 1,2008,and loans under the agreement are due March 31, 2009.IPC used loans drawn under this facility for a mandatory purchase of $166.1 million of pollution control revenue refunding bonds on April 3,2008.The company took this voluntary step to effect an interest expense savings through conversion of the bonds from an auction interest rate mode to a weekly interest rate mode. Although IPC is the current holder of the bonds,it expects to remarket the bonds to investors before the March 31, 2009 term loan due date. The IPC revolving bank credit facility is a $300 million five-year credit agreement,which is principally used to backstop commercial paper.The facility terminates on April 25,2012.Similar to the amended IDA bank facility, IPC has the right to request an increase in the aggregate principal amount of the IPC facility,in its case to $450 million,and to request one-year extensions of the then existing termination date.At March 31,2008,there were no borrowings under IPC's facility but $186 million of commercial paper was outstanding.As of May 7,2008,IPC had $201 million of commercial paper outstanding.It is worth noting that IPC currently has full availability under a $350 million secured medium-term note program,Series H,which it recently put in place.This program provides flexibility for IPC to term out its short-term debt as management has typically done when balances reach levels noted as of May 7,2008. Importantly,the IPC bank facility contains less restrictive terms and conditions than historical agreements,as it does not require a representation and warranty that no material adverse change has occurred as a prerequisite to any funding beyond the initial closing date and there are no rating triggers in the agreements that would cause default,acceleration,or puts.The only financial covenant in the facility limits the debt to total capitalization ratio as defined to 65%.At March 31,2008,the leverage ratio for IPC was 54%.The terms and conditions of the term loan credit agreement essentially mirror the bank revolver. Beyond the existing commercial paper and term loan balances noted above,IPC has a modest sinking fund payment due within the next year of $1.06 million.Its next scheduled maturity of long term debt is $81 million due December 2009.As noted above,IPC is facing a significant capital program.When capital spending is taken into account along with other expected calls on cash over the next four quarters,we note that IPC will need to access the debt markets and receive equity infusions from its parent to fund its expected negative free cash flow in order to maintain its targeted 50/50 debt/equity mix. Moody's takes a certain amount of comfort from the relative size of IPC's average outstanding commercial paper balances over the past 12-month period to its credit facility limit amount.For the 12-month period ended March 31, 2008,IPC's commercial paper balances averaged around $116 million,with the $186 million peak balance occurring in March 2008 because of capital expenditures,tax deposits paid to IDA,and reduced operating cash flows.The average balances outstanding were about $34 million during the comparable trailing 12-month period ended March 31,2007.We anticipate that IPC's commercial paper balances will range between $70 million and $240 million over the next four quarters.The peak amount will likely be dependent upon the timing of IPC's next long-term debt issuance to term out its commercial paper,consistent with management's ongoing practice. Rating Outlook IPC's negative rating outlook reflects Moody's concerns about weakness evidenced in the utility's key credit metrics in recent periods,due to the adverse effects that poor hydro conditions and the load growth adjustment rate (LGAR)have had on IPC's earnings and cash flow.Moreover,IPC faces a higher than historical average capital program over the next several years,which will require external financing to fund the expected negative free cash flow.Although recently implemented rate increases during 2008 collectively amount to approximately an additional $120 million of revenue on an annualized basis,these amounts may not be entirely sufficient to restore key credit metrics to levels commensurate with the current ratings. What Could Change the Rating -Up The negative outlook due to near term challenges related to a large capital program and the vagaries of operating a large hydroelectric system make an upgrade unlikely in the near term;however,IPC's outlook could be stabilized over the near to medium term through a combination of a return to normalized hydro conditions,stronger regulatory support in future rate proceedings,and improvement in CFO Pre-W/C to interest and debt near 3.5x and 15%,respectively,on a sustainable basis. What Could Change the Rating -Down Lower than anticipated earnings and cash flow,perhaps due to the potential continuation of drought conditions over the longer term or unanticipated lack of regulatory support in future PCA and/or general rate case proceedings,such that CFO Pre W/C to interest and adjusted debt stayed below 3.0x and 13%,respectively,for an extended period of time,could result in a negative rating action.Additionally,negative pressure could stem from one or more of the following:significant increases in hydro plant re-licensing costs and/or stringent operational constraints imposed as part of the license renewal process;any unexpected change that compromises the PCA mechanism (i.e.,inadequate cost recovery due to the effects of the LGAR as described above);any shift by IDACORP to pursue significant,debt-financed investment in more risky non-regulated businesses that increases demand on IPC cash flow and increases IPC's debt level such that its adjusted debt/adjusted capitalization ratio is inflated to well above 50%on a sustainable basis. [1]CFO pre-W/C,which is also referred to as FFO in the Global Regulated Electric Utilities Rating Methodology,is equal to net cash flow from operations less net changes in working capital items Rating Factors Idaho Power Company Select Key Ratios for Global Regulated Electric Utilities Rating Aa Aa A A Baa Baa Ba Ba Level of Business Risk Medium Low Medium Low Medium Low Medium Low CFO pre-W/C to Interest (x)[1]>6 >5 3.5-6.0 3.0- 5.7 2.7-5.0 2-4.0 <2.5 <2 CFO pre-W/C to Debt (%)[1]>30 >22 22-30 12-22 13-25 5-13 <13 <5 CFO pre-W/C -Dividends to Debt (%)[1]>25 >20 13-25 9-20 8-20 3-10 <10 <3 Total Debt to Book Capitalization (%)<40 <50 40-60 50-75 50-70 60-75 >60 >70 ©Copyright 2008,Moody's Investors Service,Inc.and/or its licensors including Moody's Assurance Company,Inc. (together,"MOODY'S").All rights reserved. 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