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MONTANA POWER $80 MILLION SECURED POLLUTION CONTROL REVENUE REFUNDING BONDS RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Dec. 1 /PRNewswire/ -- Montana Power Co.'s (MPC) proposed new $80 million series 1993B City of Forsyth, Rosebud County, Mont. secured pollution control revenue refunding bonds due Dec. 1, 2023 are rated "A-" by Fitch. The credit trend is stable.
 The rating reflects the beneficial impact of interim and permanent rate relief received in the past three years, refinancing of high- coupon securities, and continued strong contributions from MPC's conservatively financed nonregulated operations. The rating also takes into consideration such qualitative strengths as low-cost electric utility operations, minimal Clean Air Act compliance costs, and the absence of nuclear exposure.
 During the first nine months of 1993, outages at the company's Colstrip generating station adversely impacted sales and earnings at MPC's nonregulated coal mining and independent power divisions. Consequently, consolidated net income for the nine-months ended Sept. 30, 1993 declined to $57.1 million from $62.3 million for the same period the previous year. The decline in net income had modest impact on pretax interest coverage, which declined to 3.30 times (x) (adjusted for power sales from the leased Colstrip 4 unit) for the latest 12 months from 3.48x in 1992. However, return on equity declined to 11.3% from 12.2%.
 With three of the four units currently in operation and the implementation of $12.8 million of interim electric and gas rate increases in mid-October, fourth-quarter earnings should rebound. Earnings for 1994 will depend importantly on the response by state regulators to the company's pending electric and gas rate increase request and a return to normal Colstrip operations.
 Following a $21.0 million electric and $8.0 million gas interim rate increase request, the PSC authorized interim electric and gas rate increases of $8.8 million and $4.0 million, respectively effective Oct. 18, 1993. The PSC is expected to issue a final order on the company's request for permanent electric and gas rate increases of $30.9 million and $9.6 million, respectively, by the end of April 1994.
 Capital expenditures are expected to average about $225 million for 1993-1997. Cash flow should fund about 60% of expenditures, necessitating manageable external financing and rate relief needs. Entech, Inc., a wholly owned nonregulated subsidiary whose principal operation is coal mining, should continue to contribute about 50% of consolidated earnings.
 -0- 12/1/93
 /CONTACT: Ed King of Fitch, 212-908-0574/
 (MTP)


CO: Montana Power Co. ST: Montana IN: UTI SU: RTG

LG -- NY059 -- 9240 12/01/93 11:50 EST
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Publication:PR Newswire
Date:Dec 1, 1993
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