Fitch to Upgrade S-T Rating for LADWP (CA) 2001B-5 to B-8 $268.8MM Power Revs to 'F1+'

On the effective date of Feb. 4, 2015, Fitch Ratings will upgrade the short-term rating to 'F1+' from 'F1' assigned to the $268,800,000 Department of Water and Power of the City of Los Angeles Power System Variable Rate Demand Revenue Bonds series 2001B, consisting of $76,000,000 subseries B-5; $81,000,000 subseries B-6; $81,000,000 subseries B-7 and $30,800,000 subseries B-8. The short-term rating action is in connection with: (i) the substitution of the liquidity support provided by Barclays Bank plc (rated 'A/F1'; Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), with a substitute SBPA to be issued by Bank of Montreal (BMO, rated 'AA-/F1+'; Stable Outlook); and (ii) the mandatory tender of the bonds, which will occur on Feb. 4, 2015.

KEY RATING DRIVERS

On the effective date, the short-term 'F1+' rating will be based on the liquidity support provided by BMO, in the form of a substitute SBPA. The long-term rating continues to be based on the rating assigned to the bonds (rated 'AA-'; Stable Outlook). For more information on the long-term rating, see the press release dated Nov. 25, 2014, available on Fitch's website at www.fitchratings.com.

The substitute SBPA provides for the payment of the principal component of purchase price plus an amount equal to 34 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the daily and weekly rate modes in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SBPA will expire on Feb. 2, 2018, the stated expiration date, unless such date is extended; upon conversion to any mode other than daily or weekly; or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of the bonds which result in an automatic and immediate termination. The short-term 'F1+' rating will expire on the expiration or prior termination of the SBPA. A mandatory tender of the bonds is scheduled to occur on the SBPA substitution date on Feb. 4, 2015. The remarketing agent for the Subseries B-5 bonds is Barclays Capital Inc. The remarketing agent for the Subseries B-6 bonds is JPMorgan Securities LLC. The remarketing agent for the Subseries B-7 bonds is RBC Capital Markets, LLC, and the remarketing agent for the Subseries B-8 bonds is Morgan Stanley & Co. LLC.

RATING SENSITIVITIES

The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of the bonds. The long-term rating is exclusively tied to the creditworthiness of the bonds and will reflect all changes to that rating.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria'(Feb. 24, 2014);

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support'(Jan. 22, 2015).

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618

Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=856189

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 MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.