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TEXAS UTILS $300 MIL. 1ST MTGE & COLL TRUST BDS 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --

 TEXAS UTILS $300 MIL. 1ST MTGE & COLL TRUST BDS 'BBB' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Oct. 26 /PRNewswire/ -- Texas Utilities Electric Co.'s (NYSE: TXU) (TUEC) new $300 million shelf takedown of first mortgage and collateral trust bonds is rated 'BBB' by Fitch. The credit trend is stable. Proceeds from this issue will be used to fund construction spending, repay short-term debt, and for other corporate purposes.
 TUEC is now able to meet its earnings test under its indenture, letting it sell new first mortgage and collateral trust bonds after taking a $1.4 billion pre-tax charge against earnings in September 1991.
 The rating reflects Fitch's expectation that key financial indicators will move to much stronger levels once all of the Comanche Peak nuclear plant is reflected in rates. The company expects to file the next rate case in time to bond rates at Comanche Peak 2's 1993 commercial operation date. The unit has completed its hot functional tests and it is still expected to be in-service for the peak season of 1993.
 A self-examination has been underway since April 1992 to make the parent company, Texas Utilities Co., and all of its subsidiaries more competitive. On June 1, a voluntary early retirement and a voluntary severance program was offered. About 30 percent of the employees accepted one of these plans. The cost is estimated at about $263 million with TUEC, the principal subsidiary, being most affected of all units. The costs have been deferred and TUEC intends to request recovery of these costs in the next rate case.
 Lower energy sales in the first and second quarters continued to affect earnings quality protection and cash flow measures. Normalized to exclude a $1.4 billion writeoff, pre-tax interest coverages with allowance for funds used during construction (AFUDC) for the 12 months ended June 30 remained flat at 2.32 times (x) compared with year-end 1991. Internal cash flow declined to 16.8 percent vs. 19 percent over the parallel periods.
 Construction expenditures excluding AFUDC were $868 million in 1991. This figure is expected to fall to $740 million in 1992 and $664 million in 1993 before rising to $837 million in 1994. Beyond Comanche Peak Unit 2, which is expected to go into service during the 1993 peak season, the in-service date of two 750 megawatt lignite-fueled Twin Oak units has been scheduled for 1997 and 1998, respectively.
 Following its last rate order in August 1991, which is presently under appeal, TUEC took a $1.4 billion pre-tax charge against earnings in September 1991 and was precluded from incurring certain forms of new debt or preferred for 12 months following this charge. A $442 million annual increase was allowed, but this included a prudence disallowance on Comanche Peak.
 -0- 10/26/92
 /CONTACT: Anne Faber of Fitch, 212-908-0566/
 (TXU) CO: Texas Utilities Electric Co. ST: Texas IN: UTI SU: RTG


TM -- NY123 -- 5090 10/26/92 18:00 EST
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Date:Oct 26, 1992
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