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Fitch: No Rating Impact for PPL Montana, LLC's Debt Retirement

  Fitch: No Rating Impact for PPL Montana, LLC's Debt Retirement

Business Wire

NEW YORK -- September 30, 2013

PPL Montana (PPLM), LLC is expected to retire in the fourth quarter of 2013
its $338 million ($90 million outstanding) pass-through trust certificates due
2020 ('BBB-'/Stable Outlook) with cash on hand from a subsidiary of its parent
PPL Corp., according to Fitch Ratings. The debt retirement is based upon the
expected sale of 633 megawatts of hydropower assets and the Hebgen Lake
Reservoir to NorthWestern Energy. The prospective retirement of the rated debt
has no effect on Fitch's rating, which continues to be based upon the
project's cash flow resiliency amid increasing exposure to merchant market
prices.

PPLM will pay $271 million to retire the outstanding pass-through trust
certificates and terminate the sale-lease back arrangement, reacquiring its
25% (529MW) interest in the Colstrip coal-fired facility. PPLM's ownership in
the Colstrip coal-fired facility is subject to approval by the Federal Energy
Regulatory Commission. Though the PPLM debt is expected to be retired this
year, the sale of the hydropower assets to NorthWestern requires regulatory
approval that may take up to one year to obtain.

The security for the rated debt is limited to the owner-lessors' interests in
the Colstrip power plant, though PPLM's obligation to pay rent is a general
unsecured obligation of PPLM. As such, revenue derived from operation of the
entire portfolio, including the hydropower assets, is available for rent
payments. Therefore, PPLM could not sell the hydropower assets without meeting
obligations on the pass-through trust certificates and the lease.

PPLM owns, operates and leases a portfolio of 13 hydroelectric and coal-fired
generating facilities with an aggregate capacity of 1,315 MW. The PPLM
portfolio includes 11 hydro projects, a storage reservoir, the coal-fired
Corette facility and the owner-lessors' share of the Colstrip coal facility.
The pass-through certificates were issued by a pass-through trust to fund the
owner-lessors' acquisition of the leased Colstrip assets, which represent 25%
of Colstrip's 2,094MW capacity and 41% of PPLM's total portfolio capacity.
Rental payments include equity payments to the owner-lessors and annual rent
service on the pass-through trust certificates maturing in 2020.

Fitch's latest rating review of PPLM, published April 26, 2013, is available
on Fitch's website at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

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.

Contact:

Fitch Ratings
Primary Analyst
Yvette Dennis, +1-212-908-0668
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Chris Joassin, +1-312-368-3166
Director
or
Media Relations
Brian Bertsch, New York, +1-212-908-0549
brian.bertsch@fitchratings.com