D&P: COLUMBUS SOUTHERN POWER $255 MILLION FIRST MORTGAGE BONDS, FIRST MORTGAGE BONDS DESIGNATED SECURED MEDIUM-TERM NOTES (SHELF) RATED 'BBB'
CHICAGO, Oct. 11 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `BBB' (Triple-B) to Columbus Southern Power Company's shelf registration for $255 million of debt securities, consisting of first mortgage bonds and first mortgage bonds designated secured medium-term notes. Proceeds will be used to refinance long-term debt, repay short-term debt, or for other corporate purposes. Columbus Southern Power has appealed the Ohio Public Utilities Commission's (PUC) 1992 order denying recovery of $165 million of Zimmer Plant investment to the Ohio Supreme Court. Should the PUC's order be upheld, am after-tax write-off of about $145 million would be required. Such a write-off would likely result in negative retained earnings, therefore, restricting payment of preferred and common dividends. Parent American Electric Power Company, Inc. (AEP) has undertaken a systemwide, three-phase restructuring plan. The largest savings are expected to come from phase one, which calls for the reduction of 250 employees through the combination of Columbus Southern Power and Ohio Power operating functions, as well as the reduction of 500 staff positions at another division. When fully integrated by year-end 1994, phase one could achieve annual savings of up to $40 million. Successful control of costs will be important for maintenance of Columbus Southern Power's credit protection measures. Columbus Southern Power Company, a subsidiary of American Electric Power Company, Inc., serves approximately 570,000 customers in central and southern Ohio. The company owns a 25.4 percent share of Zimmer which was converted from a nuclear facility to a 1,300 mw coal-fired plant. -0- 10/11/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (AEP)
CO: Columbus Southern Power Company ST: Ohio IN: UTI SU: RTG
CK -- NY048 -- 0805 10/11/93 17:09 EDT