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Powerco’s Credit Rating Reaffirmed

Powerco’s Credit Rating Reaffirmed

Energy utility company Powerco today announced that Standard & Poor’s reaffirmed its credit rating as a stable BBB+/A2 at the conclusion of its annual review this month.

Powerco Chief Executive, Steven Boulton, commented that this was a very positive outcome for the Company, which doubled its size with the acquisition of network assets from United Networks late last year. This transaction also resulted in a more efficient capital structure for the Company.

Mr Boulton added that Powerco management is now considering various options available to the Company in refinancing its senior bank debt funding facilities, which were raised for this acquisition.

The immediate need is for refinancing $207 million of these facilities, which were to mature at the end of October this year. The maturity of this tranche has been extended to 31 January 2004, Mr Boulton said.

The Company has engaged external finance consultants to advise management for establishment of an appropriate capital structure to take account of the optimum mix of terms, conditions and source of funds for the Company’s debt portfolio. This will enable the Company to diversify its credit risks to different markets with varying maturity profiles.

A key component of this capital structure is to optimise the Company’s ability to maintain its strong BBB+/A2 credit rating from Standard & Poor’s. Mr. Boulton added that the Company is considering various financial markets, wholesale and retail, both local as well as overseas in this process including extending facilities with the existing senior bank lenders.

Note: Powerco has approximately 290,000 electricity consumer connections and 108,000 gas consumer connections in the North Island. Powerco is New Zealand’s largest gas distribution company and second largest electricity lines company. Powerco is a public listed company, and is included in the NZSX50.

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