Printer Friendly

DETROIT EDISON $160 MILLION REMARKETED SECURED NOTES 'A-/F-1' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 8 /PRNewswire/ -- Detroit Edison Co.'s (NYSE: DTE) $160 million remarketed secured notes 1993 series B due 2033 are rated 'A-/F-1' by Fitch. The notes are a takedown from a previously filed shelf registration. Proceeds will be used to refund or replace funds used for debt and preferred stock refundings. The credit trend is improving.
 The notes will be secured by general and refunding mortgage bonds of the company. The interest rate will initially bear interest at 4 5/8 percent annually through Aug. 14, 1996. Subsequently, each note will bear interest on either a daily, weekly, 30-, 60-, 90-, 180-day or long- term interest rate mode, as chosen by the company, and will be remarketed at the end of each respective interest rate period. DTE may, at its option, enter into a standby note purchase agreement to provide liquidity in the unlikely event of a failed remarketing. However, the company will ultimately be obligated to purchase any unremarketed notes if the liquidity provider fails to purchase the notes for any reason.
 The rating reflects DTE's improved financial and operating performance in recent years, the aggressive implementation of ongoing cost reduction programs, an improving economy in the company's service territory, the continued superior operating performance of the Fermi 2 nuclear power plant, and internal cash generation well in excess of capital requirements over the foreseeable future. The company's financial protection measures have improved steadily since a December 1988 rate settlement order permitting a seven-year phase-in for recovery of approved Fermi 2 nuclear power plant costs. The rate order also suspended the power supply cost recovery clause, established a five-year moratorium on base rate changes, and provided for an expense stabilization procedure allowing adjustments for inflation.
 Although competitive rate concerns are of increasing importance, along with an above-average reliance on the automobile and steel industries, the company has taken action by lowering base rates by $174 million in January 1993 and reducing industrial interruptible rates for up to 400 megawatts of power. Based on the Michigan Public Service Commission (MPSC) staff recommendation, rates could be reduced further in 1994. The staff recommended a base rate reduction of $74 million compared to a $113 million increase requested by the company. An MPSC administrative law judge proposal for decision is expected on October 20, with a final decision by the MPSC on or after Jan. 1, 1994.
 -0- 10/8/93
 /CONTACT: Stephen Fedun of Fitch, 212-908-0568/
 (DTE)


CO: Detroit Edison Company ST: Michigan IN: UTI SU: RTG

TM -- NY063 -- 0340 10/08/93 17:17 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:Oct 8, 1993
Words:428
Previous Article:AMERICAN STOCK EXCHANGE DAILY REPORT
Next Article:TEXAS UTILITIES ELECTRIC $175 MILLION OF CUMULATIVE PREFERRED STOCK RATED 'BBB-' BY FITCH -- FITCH FINANCIAL WIRE --
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters