TEXT-S&P release on International Transmission Company

(The following statement was released by the ratings agency)

March 25 - Standard & Poor's Ratings Services raised its issue-level rating on International Transmission Company's (ITC) $285 million secured debt to 'A-' from 'BBB+'. At the same time, Standard & Poor's revised its recovery rating on this debt to '1+' from '1'. The issue-level rating and recovery rating indicate expectations for a full recovery of principal in a payment default scenario.

In addition, we assigned an 'A-' issue-level rating and '1+' recovery rating to ITC's $100 million first mortgage bonds, series D, due 2018. The outlook is positive. The Novi, Mich.-based parent ITC Holdings Inc (ITC.N) has approximately $2.2 billion in total debt.

The revised ratings on secured debt are a result of a change to ITC's indenture, limiting the maximum amount of bonds that can be issued or outstanding to 66.67% of the cost or fair value of the company's assets. Previously, this amount was limited to 70%. The change to the indenture meets Standard & Poor's revised guidelines for a '1+' recovery rating on U.S. utility's first mortgage bonds, dated Sept. 6, 2007.

The positive outlook reflects a virtual monopoly company, running a low operating risk business within a constructive regulatory environment. The ratings could be raised if ITC Holdings is able to implement the Interstate Power & Light Co. transaction and its various capital projects without negatively affecting cash flows. The outlook could be revised to stable if the financial measures weaken or the FERC authorizes lower ROEs that do not support the credit quality of the company. (New York Ratings Team)