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MIDWEST POWER SENIOR DEBT 'A', CP 'F-1' BY FITCH AFTER MERGER -- FITCH FINANCIAL WIRE --

 MIDWEST POWER SENIOR DEBT 'A', CP 'F-1' BY FITCH AFTER MERGER
 -- FITCH FINANCIAL WIRE --
 NEW YORK, July 24 /PRNewswire/ -- First mortgage bonds and preferred stock assumed by Midwest Power Systems, Inc., formed by the merger of Iowa Power Inc. and Iowa Public Service Co. (IPS), are rated 'A' by Fitch. The new entity's commercial paper is rated 'F-1'. The merger was approved by the Federal Energy Regulatory Commission on July 15 and became effective July 22.
 The new ratings represent an affirmation of Iowa Power's outstanding 'A+' first mortgage bonds and an upgrade of its preferred stock, which was previously rated 'A-'. Iowa Power's Louisa County, IA, 'A-/F-1' floating rate notes are affirmed. IPS's first mortgage bonds are lowered from their previous 'A+' rating and its 'A' preferred stock is affirmed. Iowa Power has no commercial paper outstanding and its 'F-1' commercial paper rating is withdrawn. IPS has $25.2 million in outstanding CP which will mature by July 31, after which its 'F-1' rating will be withdrawn. In the future, CP will be issued by Midwest Power. All ratings are removed from FitchAlert.
 The ratings reflect expected cost savings produced by the merger and an operating profile that will include a more diversified customer and generating mix. The initial credit profile of the combined companies is weak for the rating category, but it should improve over the next several years. By 1994, internal cash generation is expected to reach 85 percent and pre-tax interest coverage about 3.0 times. Debt leverage will remain relatively high due to the debt associated with Iowa Power's guarantee of 50 percent of the bonds of the Cooper Nuclear Plant.
 -0- 7/24/92
 /CONTACT: Robert Hornick of Fitch, 212-908-0564/ CO: Midwest Power Systems, Inc. ST: Iowa IN: UTI SU: RTG


AH -- NY062 -- 3161 07/24/92 16:37 EDT
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Publication:PR Newswire
Date:Jul 24, 1992
Words:307
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