Printer Friendly

VIRGINIA ELECTRIC $200 MIL. SR. DEBT RATED 'A+' BY FITCH

 NEW YORK, Aug. 11 /PRNewswire/ -- Virginia Electric and Power Co.'s (VPC) new $100 million 6 percent first and refunding mortgage bonds and $100 million 6.0 percent first and refunding mortgage bonds due Aug. 1, 2001 and 2002, respectively, are rated "A+" by Fitch. In addition, the company's new $60 million 6.98 percent perpetual preferred stock issue is rated "A." The issues are takedowns from previously rated shelf registrations. The credit trend is stable.
 The rating reflects recently implemented rate increases and anticipation of a strongly positive Virginia State Corporate Commission (VSCC) rate decision on the recovery of purchased power expenses. Expected later this quarter, the VSCC rate order should enhance earnings protection measures, which currently are weak for the rating category. In December 1992, the VSCC permitted a $45.2 million rate increase; in the current case, the VSCC staff recommends raising rates by 8.6 percent, or $249.8 million. In February, base rates in North Carolina were increased $12.4 million. By 1996, Fitch expects interest coverage to improve to 3.5 times (x) from 3.06x, and leverage should moderate as the common stock ratio improves to 46 percent of capitalization.
 While VPC's 1992 capital ratios and interest coverage improved modestly, operating income dropped to $761.6 million versus 1991's $816.8 million, due to mild weather, a $26 million customer refund, and increased purchased power expenses. However, in first-half 1993, VPC halted its earning decline as operating income was $370.2 million, up substantially from the prior year's $339.2 million. VPC's third-quarter operations are off to an excellent start with record sendout and customer demand. Proceeds of today's bond financing will be used to retire outstanding 7.375 percent first and refunding mortgage bonds and proceeds of the new preferred will retire 7.625 percent and 7.72 percent outstanding preferred stock.
 VPC lowered its expected 20-year annual growth rate to 2.2 percent from 2.5 percent. Consequently, new generating plant construction has been deferred to at least 2002, except for the Clover plant now under construction with Old Dominion Electric Cooperative. Moderate sales growth will reduce cash requirements, which should be 90 percent funded with internal cash generation. VPC is not expected to add non- utility purchased power after the presently contracted capacity comes on-line.
 -0- 8/11/93
 /CONTACT: John Watt, 212-908-0523, of Fitch/


CO: Virginia Electric and Power Co. ST: Virginia IN: UTI SU: RTG

LG -- NY034 -- 1588 08/11/93 10:29 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 11, 1993
Words:416
Previous Article:USG CORP. ANNOUNCES COMPLETION OF 10-1/4 PERCENT NOTE EXCHANGE
Next Article:E-SYSTEMS EMASS GRANTED COMMERCIAL PATENT FOR HIGH PERFORMANCE DATA STORAGE SYSTEM
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters