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CITY OF BECKER, MINN. $100 MILLION POLLUTION CONTROL REVENUE BONDS 'AA-/F-1+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK Sept. 21 /PRNewswire/ -- The City of Becker, MN's $100 million pollution control revenue bonds, (Northern States Power Co.- Sherburne County Generating Station Unit 3 Project) series 1993-A and B, initially issued as money market securities, are rated 'AA-/F-1+' by Fitch. The credit trend is stable.
 The 'F-1+' rating refers to the demand features of these bonds. Payment of principal and interest is supported by an agreement where the remarketing agent (Kidder, Peabody & Co. or Goldman, Sachs & Co.) has agreed to use its best efforts for resale of the bonds. In the event the remarketing proceeds are insufficient, the bonds shall be paid by Northern States.
 The 'AA-' rating reflects the pledge of Northern States to make payments sufficient to pay the principal, premium, if any, and interest on the bonds. Northern States 'AA' senior debt rating reflects a well managed balance sheet and improving interest coverage, as well as qualitative strengths such as low cost operations, a healthy service territory, good nuclear and coal plant performance, and minimal acid rain exposure.
 Although NSP has no baseload construction planned until shortly after the turn of the century, the company estimates utility capital expenditures will increase about 41 percent to $2.4 billion over the next five years. The higher expenditures, slated for transmission upgrades, two peaking units, nuclear fuel, and replacements and improvements for its electric and gas system will require ongoing rate support. Non-utility capital expenditures are expected to total about $480 million over this period.
 Financial protection measures have improved primarily due to more normal 1993 weather and interim electric and gas rate relief. For the 12 months ended June 30, 1993, earnings from continuing operations were $175.9 million, 9.3 percent above year-end 1992, and pretax interest coverage increased to 3.53 times (x) from 3.32x. Debt leverage declined to 41.6 percent at June 30 from 44.5 percent at year-end 1992, and return on equity increased to 10.3 percent from 9.3 percent over the comparable period. Internal cash generation of capital expenditures, about 74 percent in 1992, increased slightly to approximately 76 percent for the 12 months ended June 30.
 Following a $112.3 million electric and $12.4 million gas rate request, the Minnesota Public Utilities Commission (PUC) authorized interim electric and gas rate increases of $71.2 million and $8.4 million, respectively, effective Jan. 1, 1993. A final decision on the gas case authorized an $8.3 million increase effective Jan. 1, 1994. A preliminary decision has been rendered on the electric portion of the case authorizing a $54 million increase. In both cases, the PUC authorized a below industry average 11.0 percent return on equity. On Sept. 21, NSP applied for reconsideration of various issues with the PUC.
 -0- 9/21/93
 /CONTACT: Ed King of Fitch Financial Wire, 212-908-0574/


CO: Northern States Power Co. ST: Minnesota, New York IN: OIL SU: RTG

LD -- NY094 -- 4399 09/21/93 17:33 EDT
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Publication:PR Newswire
Date:Sep 21, 1993
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