DBRS Comments on Consumers’ Waterheater Operating Trust

DBRS notes today that The Consumers’ Waterheater Income Fund (Fund) and The Consumers’ Waterheater Operating Trust (Trust) have announced details of the Fund’s expected conversion from an income trust to a dividend-paying corporation. Additionally, the Fund and the Trust will be changing their names to EnerCare Inc. and EnerCare Solutions Inc. (EnerCare Solutions), respectively.

If approved, the conversion is expected to occur on January 1, 2011, with the current Fund distribution expected to continue at its current level as a dividend. EnerCare Solutions, the successor to the Trust, will assume the three series of Senior Notes.

DBRS believes that the proposed conversion will have no impact on the Trust’s current credit rating as it is not expected to result in any substantive changes other than its legal structure. However, DBRS notes that the Trust’s Senior Notes rating is currently “A” with a Negative trend. DBRS continues to monitor the Trust’s attrition levels and financial results, the primary drivers of the Negative trend.

Notes:
The applicable methodology is Rating North American Energy Utilities (Electric, Natural Gas and Pipelines), which can be found on the DBRS website under Methodologies.