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BOSTON EDISON CO. $1.1 BILLION DEBS RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, March 25 /PRNewswire/ -- Boston Edison Co.'s $1.1 billion debentures are rated 'BBB' by Fitch. The 'BBB+' first mortgage bond rating is withdrawn. The credit trend is improving.
 The company recently redeemed all of its $598.6 million publicly rated first mortgage bonds with the proceeds of a $650 million debenture offering, saving about $8.5 million in annual interest expense. Except for privately placed issues and one tax-exempt public issue, the debentures are now Boston Edison's senior debt. Improvement in credit quality is expected as a result of rate increases and a significant cash benefit provided by a three-year settlement agreement approved by the Massachusetts Department of Public Utilities (MDPU) in October.
 Rates increased by $29 million in November 1993 and will increase by a like amount in November 1994 based on an 11.75 percent return on equity. As part of the settlement, rates will not be reduced to reflect the November 1993 expiration of a $60 million purchased power contract. Non-cash accounting adjustments also will be used by the company to earn its allowed return through 1994.
 Credit quality is also supported by the resolution of operating difficulties at the Pilgrim nuclear plant. The unit's capacity factor was 84 percent for the performance year ended 1992, and based on performance standards stipulated by an earlier three-year 1989 rate agreement earned the company an $8 million performance award. The company essentially met all performance criteria during the first two years of the agreement.
 The current rate agreement applies nuclear plant performance standards established by the 1989 agreement to the recovery of a portion of Pilgrim costs during 1992-2000. Specifically, about 25 percent of the unit's capital costs since 1986, plus 25 percent of its operating costs, including a return on capital, will be excluded from retail rates and recovered through a kwh charge based on capacity factor. The company recovers all costs if the plant operates within a 60 percent- 68 percent capacity factor and earns a bonus or penalty for a factor outside of this range.
 Pretax coverage of interest excluding allowance for funds used during construction is expected to approach 2.5 times (x) by 1994 compared to 1.88 x for the twelve months ended September 1992. Internal cash generation of construction expenditures should stabilize at the 83 percent recorded for the same period. Total debt as a percent of capitalization declined to 55.4 percent from 58.4 percent as a result of a $60 million in equity offered during the third quarter.
 -0- 3/25/93
 /CONTACT: Josephine Zeppieri, CFA, 212-908-0575, of Fitch/
 (BSE)


CO: Boston Edison Co. ST: Massachusetts IN: UTI SU: RTG

LR -- NY056 -- 9607 03/25/93 13:00 EST
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Publication:PR Newswire
Date:Mar 25, 1993
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