DUFF & PHELPS: CINCINNATI GAS & ELECTRIC COMPANY $300 MILLION FIRST MORTGAGE BONDS RATED 'BBB+'
CHICAGO, Sept. 29 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `BBB+' (Triple-B-Plus) to Cincinnati Gas & Electric Company's (NYSE: CIN) ("CG&E") proposed $300 million offering of first mortgage bonds. The securities will join CG&E's outstanding securities on Rating Watch -- Neutral/Up. Proceeds primarily will be used to refund higher cost debt. In August, the Ohio Public Utilities Commission ("OPUC") approved a stipulation and recommendation agreement between CG&E, the OPUC staff, and industrial intervenors. Under the agreement, CG&E received an electric rate increase of $41 million (4.6 percent), and a gas rate increase of $19 million (5.5 percent). Although the settlement was significantly less than requested, the absence of litigation is a positive. Under the agreement, CG&E agreed not to increase base rates prior to June 1995, with the exception of the third step of the previously authorized Zimmer increase scheduled for May 1994. Rates may be adjusted for cost savings stemming from the pending merger with PSI Resources, Inc. and its subsidiary PSI Energy Inc. (PSI). Supportive rate regulation will continue to be important to credit quality maintenance. CG&E and PSI continue to pursue a combination. Under the proposal both PSI and CG&E would become operating subsidiaries of a holding company called CINergy Corp. The merger has received approval from the Federal Energy Regulator Commission; approvals from the Securities and Exchange Commission and shareholders of both companies may be received as early as year-end. The combined companies should be able to reduce costs through elimination of overlapping functions and deferral of new capacity additions. The companies' have estimated merger savings of about $1.5 billion over 10 years. Cincinnati Gas & Electric Company is a combination utility providing electric and gas service in the southwestern portion of Ohio and adjacent areas in Kentucky and Indiana. -0- 9/29/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (CIN)
CO: Cincinnati Gas & Electric Company ST: Ohio IN: UTI SU: RTG
TM -- NY086 -- 7016 09/29/93 17:49 EDT
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|Date:||Sep 29, 1993|
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