Conectiv Is Rated 'BBB+' By S&P.NEW YORK--(BUSINESS WIRE)-- Standard & Poor's CreditWire 8/25/98-- Standard & Poor's assigned its triple-'B'-plus corporate credit rating and stable outlook to Conectiv, which was formed during 1998 as the holding company for Atlantic Energy Inc., the since-dissolved parent of Atlantic City Atlantic City, city (1990 pop. 37,986), Atlantic co., SE N.J., an Atlantic resort and convention center; settled c.1790, inc. 1854. Situated on Absecon Island, a barrier island 10 mi (16. Electric Co. (A-/Stable/A-2), and Delmarva Power & Light Co. (A/Stable/A-1). In addition, Standard & Poor's affirmed its triple-B'-plus bank loan rating of the company. While no debt has been issued thus far at Conectiv, the company may issue short- and long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. at some point in the future. Conectiv derives its ratings from the performance of its utility operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , which now provide most of the parent's operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . Conectiv has an average business position, which reflects the utilities' diverse, balanced power supply, supportive regulatory environments and regional economic strength, tempered by Atlantic City Electric's above-market nonutility generation contracts, and nuclear exposure. Conectiv's ratings should also be enhanced if the company is able to capture the projected merger savings of $500 million over the next 10 years. While Delmarva Power's generating facilities are among the most efficient in the mid-Atlantic region, Atlantic Electric's heavy reliance on high-cost purchased power has resulted in above average rates, which could erode Erode (ĕrōd`), city (1991 urban agglomeration pop. 361,755), Tamil Nadu state, S India, on the Kaveri River. The city is located in a cotton-growing region, and its industries include cotton ginning and the manufacture of transport equipment. the company's revenues in a competitive industry. However, restructuring legislation expected to be enacted in New Jersey in late 1998 or 1999 should support the full recovery of these costs. The next several years will be pivotal for Conectiv, which will attempt to grow its unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. businesses to compensate for some loss of revenues and relatively slow earnings growth at its core utility businesses. Adjusted pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern interest coverage should rise to more than 3 times (x) and adjusted funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. interest coverage should be about 3.6x during 2000. OUTLOOK: STABLE The stable outlook reflects the company's balanced business profile that should enable it to deliver solid financial performance going forward. Conectiv's ongoing efforts to reduce costs and boost customer loyalty at both utility subsidiaries, as well as its strategic focus to offer an array of energy services and products, should bolster its competitive profile, Standard & Poor's said. -- CreditWire
CONTACT: Ted Olshanski, New York 212/208-1757
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