The rating on Huntsville, Ala.'s warrants reflects the city's: * Business profile of '2', * Strong and stable financial performance with extremely high debt service coverage (DSC) levels, and * Manageable capital improvement program with no plans for additional debt in the intermediate term. Offsetting these strengths are Huntsville's (GO rating, 'AA') all-requirements relationship with a sole supplier—Tennessee Valley Authority (TVA), which is burdened by high debt levels and uncertainty relating to liability of the utility, if any, for stranded costs. TVA increased rates late last year in an effort to lower its debt burden. Huntsville is negotiating a partial requirements contract with TVA, which would allow the utility to purchase power elsewhere. The business profile of '2' assigned to
