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ENSERCH SENIOR DEBT LOWERED TO 'BBB' BY FITCH, COMMERCIAL PAPER AFFIRMED -- FITCH FINANCIAL WIRE --

ENSERCH SENIOR DEBT LOWERED TO 'BBB' BY FITCH, COMMERCIAL PAPER AFFIRMED
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Feb. 14 /PRNewswire/ -- ENSERCH Corp.'s senior debt is lowered to 'BBB' from 'BBB+' by Fitch. Its convertible subordinated debt and adjustable rate preferred shares are lowered to 'BBB-' from 'BBB'. These changes apply to approximately $800 million of fixed- income instruments. The company's 'F-2' commercial paper rating is affirmed. The company's new $500 million shelf registration of debt securities is rated 'BBB'. The credit trend is stable.
 The company's financial performance has been weak for some years, as evidenced by thin credit protection measurements and debt leverage which is aggressive for the current and anticipated level of business risk.
 With deteriorating gas prices and increasing regulatory uncertainty, management took actions to reposition the company to weather these changes. It divested several non-strategic assets and refocused the enterprise into three core businesses. The company used proceeds of these asset sales to reduce debt, conserved cash, and trimmed dividends and capital spending to fit lower cash flows. However, charges associated with some asset value restructurings eroded the equity base, allowing no progress in leverage reduction.
 The price of natural gas is the single most important determinant of the company's performance. While there now appears to be little downside price risk, it could be some time before a meaningful upward progression in gas prices and the company's earnings develops. Until its cash flows advance further, ENSERCH remains capital-constrained, and capital expenditures could be insufficient to replace reserves over the near term.
 ENSERCH Corp., headquartered in Dallas, is a diversified energy company, engaged in exploration and production, natural gas transmission and distribution, and engineering and construction through EBASCO Services.
 -0- 2/14/92
 /CONTACT: Mary Anne Sudol, CFA of Fitch, 212-908-0562/
 (ENS) CO: ENSERCH Corp. ST: Texas IN: OIL SU: RTG


JT -- NY077 -- 0409 02/14/92 17:33 EST
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Publication:PR Newswire
Date:Feb 14, 1992
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