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CONSUMERS POWER $300 MILLION SENIOR DEBT SHELF RATED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 20 /PRNewswire/ -- Consumers Power Co.'s (CPC) $300 million first mortgage bonds shelf is rated "BBB+" by Fitch. When combined with a previously rated shelf registration, Consumers Power can issue a maximum of $600 million of new first mortgage bonds. Proceeds are expected to be used for repurchase or redemption of securities, construction expenditures, and other corporate purposes, including the repayment of short-term debt. The credit trend is improving.
 The rating reflects the Michigan Public Service Commission's (MPSC) unanimous approval on March 31, 1993, and subsequent affirmation of a settlement agreement between the MPSC staff and CPC regarding the pricing of power purchases by CPC from the Midland Cogeneration Venture Partnership (MCV). The order resulted in a net after-tax non-operating loss of $343 million in 1992, reflecting less than full recovery of MCV-related costs. It also resolves years of litigation and arrests the financial deterioration that caused after-tax losses totaling $262 million prior to the settlement. Furthermore, it establishes a sound framework for improving regulatory relations and financial protection measures going forward.
 The combination of a growing service territory, competitive rates, continued deleveraging, equity infusions by CMS Energy, the parent company, and reasonable rate relief provide a realistic opportunity to reduce currently high debt leverage to about 56 percent of capitalization from 64 percent over the next several years and increase pretax interest coverage to approximately 3.0 times (x) from 1.81x in 1992. Additionally, Consumers effected a quasi-reorganization of its equity that permitted resumption of dividends to CMS Energy.
 In May, Consumers filed a three-step electric rate increase with the MPSC totaling $165.6 million to be phased-in over three years. The request includes an interim rate increase of $92.1 million and increases of $35.1 million in 1994 and $38.4 million starting on Jan. 1, 1995. Hearings before the MPSC commenced in August and will continue through the latter part of November. An MPSC decision on the proposed interim request is possible by the end of 1993 or the beginning of 1994, with a final decision on the total increase during second-quarter 1994.
 -0- 9/20/93
 /CONTACT: Stephen Fedun of Fitch, 212-208-0568/
 (CMS)


CO: Consumers Power Co. ST: Michigan IN: OIL SU: RTG

TW -- NY074 -- 3706 09/20/93 13:22 EDT
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Publication:PR Newswire
Date:Sep 20, 1993
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