On the effective date of Feb. 12, 2014, Fitch Ratings will take various rating actions on the short-term ratings assigned to the $580,800,000 Department of Water and Power of the City of Los Angeles (LADWP), CA, Power System Variable Rate Demand Revenue Bonds (VRDBs), 2001 series B, consisting of:

--$100,000,000 subseries B-1;

--$106,000,000 subseries B-2;

--$106,000,000 subseries B-3;

--$76,000,000 subseries B-5;

--$81,000,000 subseries B-6;

--$81,000,000 subseries B-7;

--$30,800,000 subseries B-8.

Fitch will take the following actions: (i) confirm the 'F1+' ratings assigned to the subseries B-1, B-2 and B-3 bonds; and (ii) downgrade the short-term ratings to 'F1' from 'F1+' for subseries B-5, B-6, B-7 and B-8 bonds. The short-term rating actions are in connection with the substitution of the liquidity support provided in the form of standby bond purchase agreements (SBPAs) currently issued by Royal Bank of Canada, acting through its New York Branch (Royal Bank of Canada, rated 'AA/F1+', stable outlook) for the subseries B-2, B-5, B-6 and B-7 bonds, and Wells Fargo Bank, National Association (Wells Fargo, rated 'AA-/F1+', stable outlook) for the subseries B-1, B-3, and B-8 bonds with substitute SBPAs to be provided by Royal Bank of Canada for the subseries B-1, B-2 and B-3 bonds, and Barclays Bank PLC ('A/F1', stable outlook) for the subseries B-5, B-6, B-7 and B-8 bonds.

KEY RATING DRIVERS:

On the effective date of the substitutions, the short-term 'F1+' rating on the subseries B-1, B-2 and B-3 bonds will be based on the liquidity support provided by the two Royal Bank of Canada substitute SBPAs and the short-term 'F1' rating for the subseries B-5, B-6, B-7, and B-8 bonds will be based on the support of the Barclays Bank PLC substitute SBPA. The long-term rating assigned to all the bonds continues to be based upon the rating assigned by Fitch to the LADWP's power revenue bonds.

Each 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 or weekly interest 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 SBPAs will expire on Feb. 11, 2016 (subseries B-1 and B-3), Feb. 10, 2017 (subseries B-2), Feb. 11, 2015 (subseries B-5 through B-8), the stated expiration dates, unless such dates are extended, conversion to a mode other than the daily or weekly rate mode; or upon the occurrence of certain other events of default which result in a mandatory tender or upon any prior termination of the SBPAs. The short-term ratings will expire on the expiration or prior termination of the related SBPA.

For information on the long-term rating, see the press release dated May 8, 2013, available on Fitch's website at www.fitchratings.com.

RATING SENSITIVITIES:

The short-term ratings reflects the short-term ratings that Fitch maintains on the banks providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term ratings of the banks and, in some cases, the long-term rating of the bonds. The long-term rating is exclusively tied to the creditworthiness of the bond obligor 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. 27, 2013;

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support', Jan. 27, 2014.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701570

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=730736

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Fitch Ratings
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Joseph Staffa, +1 212-908-0829
Senior Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
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Mario Civico, +1 212-908-0796
Senior Director
or
Committee Chairperson
Trudy Zibit, +1 212-908-0689
Managing Director
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