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NORTHERN STATES $170 MILLION IN FIRST MORTGAGE BONDS 'AA' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Dec. 7 /PRNewswire/ -- Northern States Power Co.'s $100 million 5.75% first mortgage bonds due Nov. 15, 2000 and $70 million 6.125% first mortgage bonds due Nov. 15, 2005 are rated `AA' by Fitch. The issues are takedowns from a previously rated shelf registration.
 The rating reflects a well managed balance sheet and improving interest coverage, as well as qualitative strengths such as low-cost operations, a healthy service territory, good nuclear and coal plant performance, and minimal acid rain exposure.
 Financial protection measures have improved for this Minnesota company primarily due to more normal 1993 weather and interim electric and gas rate relief. For the 12 months ended June 30, 1993, earnings from continuing operations were $175.9 million, 9.3% over year-end 1992, and pretax interest coverage increased to 3.53 times (x) from 3.32x. Debt leverage declined to 41.6% at June 30, from 44.5% at year-end 1992, and return on equity increased to 10.3% from 9.3% over the comparable period. Internal cash generation of capital expenditures, about 74% in 1992, increased slightly to approximately 76% for the 12 months ended June 30.
 Following a $112.3 million electric and $12.4 million gas rate request, the Minnesota Public Utilities Commission (PUC) authorized interim electric and gas rate increases of $71.2 million and $8.4 million, respectively, effective Jan. 1, 1993. A final decision on the electric case authorized an increase of $54 million and a gas rate increase of $8.3 million, both effective Jan. 1, 1993. In both cases, the PUC authorized a below-industry-average 11.0% return on equity.
 In a significant positive development, after various issues of this rate order were reconsidered by the PUC, the PUC voted on Nov. 10 to authorize additional electric and gas rate increases of about $20 million. About $10 million of this increase resulted from the commission reconsidering its position on return on equity, which they voted to increase to 11.47% on reconsideration.
 Although NSP has no baseload construction planned until shortly after the turn of the century, the company estimates utility capital expenditures will increase over the next five years, but at a reduced level than the $2.4 billion originally forecast. A revised forecast is expected shortly.
 -0- 12/7/93
 /CONTACT: Ed King of Fitch, 212-908-0574/
 (NSP)


CO: Northern States Power Co. ST: Minnesota IN: UTI SU: RTG

CK -- NY096 -- 1464 12/07/93 17:24 EST
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Publication:PR Newswire
Date:Dec 7, 1993
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