DUFF & PHELPS: NEW YORK TELEPHONE $250 MILLION 6.7 PERCENT DEBENTURES DUE 2023 RATED 'A'; $150 MILLION 5-5/8 PERCENT NOTES DUE 2003 RATED 'A'
CHICAGO, Oct. 27 /PRNewswire/ -- Duff & Phelps Credit Rating Co. today announced that it has assigned a rating of `A' (Single-A) to New York Telephone Company's issuance of $250 million of 6.7 percent debentures due Nov. 1, 2023, and $150 million of 5-5/8 percent notes due Nov. 1, 2003. The 6.7 percent, 20 year no call, debentures were priced at 97.606 to yield 6.89 percent and the 5-5/8 percent, noncallable notes were priced at 98.403 to yield 5.838 percent. Proceeds will be used to refinance high cost debt. New York Telephone operates in a highly competitive service territory, has high cost operations despite recent expense reductions, and an historically difficult regulatory environment. Aggressive operating expense cuts coupled with reductions in interest expense caused by lower interest rates has led to modest improvement in pretax interest coverages. Cost control efforts remain critical in order for New York Telephone to maintain or improve operating earnings in the face of strong competition and the weak economy in New York. Internal funds generation over 1993-95 (assuming an 85 percent dividend payout to NYNEX) should fund estimated construction expenditures in excess of $4.0 billion. Duff & Phelps Credit Rating Co. rates the refunding mortgage bonds and debentures of New York Telephone at the same level (Single-A) since New York Telephone covenants that no new refunding mortgage bonds will be issued while any debentures remain outstanding. New York Telephone provides local exchange telecommunications services to 10.1 million access lines in New York and a small portion of Connecticut. Three-quarters of its access lines are in the highly competitive New York metropolitan area. New York Telephone is a wholly owned subsidiary of NYNEX Corporation. -0- 10/27/93 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125/ (NYN)
CO: New York Telephone Company ST: New York IN: TLS SU: RTG
TS -- NY106 -- 7469 10/27/93 16:00 EDT
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|Date:||Oct 27, 1993|
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