Thursday, March 18, 2004

Fitch lowers bond rating for DPL

The Associated Press

DAYTON, Ohio - New York-based Fitch Inc. lowered its bond rating for DPL Inc. Wednesday, citing the utility company's delay in filing its annual financial report with federal regulators.

Fitch said the delay heightens concerns about DPL's corporate liquidity.

Fitch lowered from BBB to BBB- the rating on DPL's senior unsecured debt. It also put the company on its negative watch rating list.

DPL is the parent company of Dayton Power and Light Co. The utility serves about 500,000 customers in western and southwestern Ohio, including portions of Butler and Warren counties.

Monday, DPL requested a 15-day extension for filing its annual 10-K report with the U.S. Securities and Exchange Commission. But DPL said it did not expect its 2003 financial statements to differ materially from the company's previously announced unaudited results. However, Fitch said the delay temporarily prevents DPL from obtaining funding in the public market and may affect the company's access to private debt or bank funding.

DPL spokesman Jim Prendergast said that while the company is disappointed in the bond rating downgrade, it currently has the highest liquidity in its history.

Tuesday, a committee of DPL's board said it hired a law firm to review concerns raised by an employee warning actions by DPL's top three executives could incur scrutiny by federal regulators and the Internal Revenue Service.

The Dayton Daily News reported that DPL controller Daniel Thobe wrote a memo expressing concern about executive compensation, lack of documentation of corporate travel and questionable internal controls. DPL called the concerns in the memo "unsubstantiated" and that the employee has no basis for the assertions.

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