Monday August 30, 5:08 pm Eastern Time

S&P cuts USEC Inc senior unsecured
debt

(Press release provided by Standard & Poor's) 

NEW YORK, Aug 30 - Standard & Poor's today lowered its
long-term ratings for USEC, Inc.

The short-term ratings for the company are affirmed (see list below).

All ratings are removed from CreditWatch, where they were placed on June 10, 1999.

The outlook is negative.

The downgrade reflects heightened competition in the market, a dramatic deterioration in SWU
pricing, uncertainty regarding the HEU contract with Techsnabexport Co. Ltd. (Tenex, a Russian
government entity), the anticipation that USEC will continue to underperform Standard & Poor's
original expectations, and the uncertainty regarding USEC's plans for replacing or refurbishing its
asset base.

Although Standard & Poor's anticipated some deterioration in SWU pricing, prices have eroded at
a rate faster than expected.

The deterioration results from over capacity in the market (by about 20%), heightened
competition from a low-cost competitor, and Kazakhstan terminating its participation under the
company's HEU contract with Tenex.

Standard & Poor's does not anticipate any near-term improvement in prices due to limited
growth in demand, overcapacity in the market, and increased competition among the enrichment
providers.

Due to heightened competition and lower SWU prices, Standard & Poor's expects USEC to
continue to underperform expectations with respect to profitability and cash flow, but pre-tax
interest coverage still is expected to be good in the 6x area over the near-term.

Low SWU prices are also dramatically diminishing the profitability of the company's HEU
contract with Tenex, which threatens the stability of the contract.

Standard & Poor's believes that continuing this contract is critical to preserving market stability
given the turmoil that Russian exports created in the late 1980s.

In addition to problematic market fundamentals, USEC faces significant capital expenditure
requirements to replace or refurbish its existing asset base within the next ten years.

USEC was expected to replace its current technology with AVLIS, which would have improved
the company's cost position, but recently terminated its development spending due to poor
economics.

The company is evaluating alternative technologies, and has plenty of time to evaluate the
possibilities, but the uncertainty creates some risk.

OUTLOOK: NEGATIVE

Should prices continue to deteriorate or USEC have problems finding a viable alternative to
AVLIS, the rating could be lowered, Standard & Poor's said. RATINGS LOWERED AND
REMOVED FROM CREDITWATCH

TO FROM USEC Inc.

Corporate credit rating BBB BBB+

Senior unsecured debt BBB BBB+

Bank loan rating BBB BBB+ RATINGS AFFIRMED

Short-term corporate credit rating A-2

Commercial paper A-2 

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