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CENTRAL HUDSON GAS AND ELECTRIC $258.7 MILLION SENIOR DEBT RAISED TO 'A' BY FITCH -- FITCH FINANCIAL WIRE --

CENTRAL HUDSON GAS AND ELECTRIC $258.7 MILLION SENIOR DEBT RAISED TO 'A'
 BY FITCH -- FITCH FINANCIAL WIRE --
 NEW YORK, May 7 /PRNewswire/ -- Central Hudson Gas and Electric Corp.'s (CHG) outstanding $258.7 million first mortgage bonds, including $16.7 million secured pollution control bonds, are raised to 'A' from 'A-' by Fitch. Its $20 million preferred stock is raised to 'A-' from 'BBB+'. CHG's $125 million shelf debt registration is rated 'A' for secured debt and 'A-' for unsecured debt. The credit trend is improving.
 CHG's financial measures are below traditional levels for 'A' rated companies. However, the upgrades reflect a positive electric rate order and the expectation of continued support from the New York Public Service Commission. The company also has a low risk profile and financial measures are expected to continue their gradual improvement of the past several years.
 This electric and gas combination utility's capital structure has steadily improved since 1987, when a $169.3 million writeoff was taken for disallowed construction costs for the Nine Mile Point Two (NMP2) nuclear unit. However, earnings protection measures improved slowly because the company is not allowed to earn a return for rate-making purposes on the after-tax amount of the disallowed investment. Refinancing of higher cost debt, new common stock issues, and rate increases since 1990 also helped improve financial protection measures, although NMP2 has experienced higher than expected operating costs.
 Earnings protection measures should continue to improve gradually, reflecting an $18.3 million (4.6 percent) electric rate increase granted in April. Fitch expects the commission to continue to support strong financial protection measures. This support was reflected in the commission's statement that "This coverage provides continued support for improvement in the company's bond rating."
 Management is committed to rebuilding its common equity ratio. This ratio has improved steadily; the 1991 sale of 600,000 new common shares helped build the measure to 40.8 percent. CHG has requested permission to issue up to one million new common shares. Debt leverage also improved to 50 percent at year-end 1991 from 54.8 percent in 1987.
 No construction of new base load capacity is anticipated. The 1992- 1996 cash construction program of $362 million with working capital requirements, will be funded 90 percent internally.
 -0- 5/7/92
 /CONTACT: Anne Faber of Fitch, 212-908-0566/
 (CNH) CO: Central Hudson Gas and Electric Corp. ST: New York IN: UTI SU: RTG


SH -- NY045 -- 7537 05/07/92 10:41 EDT
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Publication:PR Newswire
Date:May 7, 1992
Words:410
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