Fitch Rates Xcel Energy Inc.'s Shelf `A-'.Business Editors NEW YORK--(BUSINESS WIRE)--Sept. 29, 2000 Fitch assigns an 'A-' rating to Xcel Energy Inc.'s new $1 billion shelf registration of unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. securities. Proceeds from the sale of the securities will be used for general corporate purposes including funding operating units and subsidiaries and for the repayment of short- term debt. In addition, Fitch affirmed the company's $325 million commercial paper program at `F2' and its preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. rating at `BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. +'. Xcel Energy's Rating Outlook remains Stable. Xcel Energy is a utility holding company formed in Aug. 2000 through the merger of Northern States Power Company Northern States Power Company (formerly NYSE: NSP) was a publicly-traded S&P 500 electric and natural gas utility holding company based in Minneapolis, Minnesota that is now a subsidiary of Xcel Energy (NYSE: XEL). and New Century Energies, Inc. (NCE NCE Networks of Centres of Excellence NCE New Chemical Entity (pharmaceutical research) NCE Normal Curve Equivalent NCE New Civil Engineer (UK Journal) NCE Non-Commercial Educational NCE New Century Energies ). The ratings for Xcel Energy reflect the combined credit strength and collective cash flows of its four regulated utility franchises (listed below) and the growing importance of the non-regulated merchant generation business of majority-owned NRG Energy, Inc. and telecommunications activities. The addition of NCE's predominately regulated cash flow stream supports the credit quality of the holding company and complements Xcel Energy's growing nonregulated businesses. The operating utilities' credit fundamentals will benefit from the expected synergistic cost savings that in aggregate are estimated at more than $1.1 billion over a 10-year timeframe. Consolidated financial measures are expected to be healthy reflecting the strong cash flows of the regulated utilities. In the first couple of years after the merger, regulated earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) will account for about 70% of consolidated EBITDA. Thereafter, nonregulated businesses begin to increase their contributions. Consolidated EBITDA interest coverage is estimated to approximate 3.2 times (x) in 2000, improving to 3.8x by the end of the forecast period in 2004. Debt to EBITDA, excluding nonrecourse debt, of 3.1x declines to 2.5x. Including nonrecourse debt, the debt to EBITDA ratio improves from 4.3x to 3.2x. The year 2000 credit measures are on the low side since the merger occurred late in the year and few cost savings have been assumed. The noted ratios are indicative of the assessed rating category for an integrated electric utility holding company with exposure to nonregulated activities. Xcel Energy owns four regulated and integrated electric and gas utility companies, Northern States Power Co., Minnesota, Northern States Power Co., Wisconsin, Public Service of Colorado and Southwestern Public Service. In the United States, Xcel Energy serves approximately 3.1 million electricity customers and 1.5 million natural gas customers in 12 states including Arizona, Colorado, Kansas, Michigan, Minnesota, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Wisconsin, and Wyoming. Internationally, the company will serve about 2.0 million electric customers and 400,000 natural gas customers in the United Kingdom. Through its unregulated subsidiaries which includes NRG NRG Energy NRG NRG Energy, Inc. NRG Natural Resources Group NRG New Radiancy Group NRG Network Referral Group NRG Network Resource Grapher NRG Numerics Rapporteur Group NRG Neuroprosthetics Research Group NRG notional requirements generator , Xcel Energy will be involved in the development, acquisition, ownership and operation of merchant electricity generating facilities, and telecommunications. Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Insurance, Corporates, Structured Finance, Sovereigns and Public Finance Markets worldwide. |
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