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CENTRAL POWER AND LIGHT COMPANY $325 MILLION FIRST MORTGAGE BONDS (SHELF) RATED 'A' BY DUFF & PHELPS

 CHICAGO, Oct. 8 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of "A" (Single-A) to Central Power and Light Company's shelf registration for $325 million of first mortgage bonds. Proceeds will be used primarily to redeem or repurchase outstanding first mortgage bonds and preferred stock.
 Central Power and Light's financial fundamentals have improved and continued progress is expected now that the company's investment in the South Texas Project (STP) is fully reflected in rate base. With the major construction program completed, projected capital expenditures are lower and should be mostly financed by internal cash. Coverages should stabilize as the higher operation and maintenance costs related to the STP are offset by increased kwh sales and lower interest expense.
 Operations at the two-unit 2,500 mw STP plant, of which Central Power and Light is a 25 percent owner, are a current concern. The plant has been down since February of 1993, due to equipment problems and a backlog of maintenance items. In June, the plant was added to the Nuclear Regulatory Commission's (NRC) "Watch List" as a Category II. The Category II designation deems that increased NRC attention is warranted, but allows for full plant operation. However, approval from the regional NRC office will be necessary to restart the units; one unit may be allowed to restart before yearend. Recovery of replacement power costs will be an issue in the uncertain Texas regulatory environment. Recovery of large deferred costs associated with the STP adds some uncertainty and increases risk.
 Parent Central and South West's merger agreement with El Paso Electric Company is not expected to have a material impact on Central Power and Light's credit quality.
 Central Power and Light Company is the largest of Central and South West Corporation's four electric utility subsidiaries. The company supplies electric service to approximately 566,000 customers in South Texas.
 -0- 10/8/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/
 (CSR)


CO: Central Power and Light Company ST: Texas IN: UTI SU: RTG

TW -- NY021 -- 0117 10/08/93 11:32 EDT
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Publication:PR Newswire
Date:Oct 8, 1993
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