DUFF & PHELPS: HYDRO-QUEBEC $200 MILLION SERIES 'IJ' DEBENTURES RATED 'AA'
CHICAGO, Sept. 10 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a `AA' (Double-A) rating to Hydro-Quebec's US$200 million euro offering of Series "IJ" debentures. The floating rate securities will bear interest at LIBOR (six months) less 0.25 percent with a minimum of 5 percent and a maximum of 8 percent. Proceeds will be used to refinance higher cost debt. Hydro Quebec's credit fundamentals are expected to remain near their presently strong levels. Hydro Quebec's low-cost predominantly hydro electric system provides a competitive advantage. Relatively small planned rate increases and sales growth should allow maintenance of appropriate coverages and capital ratios. Hydro Quebec has implemented progressive cost control programs in response to a reduced level of rate increases and the debt guarantee fee instituted by the Province of Quebec in 1992. The economy in Quebec, neighboring provinces, and the northeastern United States will continue to affect sales gains and profit margins. Capital expenditures are projected to remain relatively high, peaking in 1993-94, with the completion of three new generating stations by 1995. Slower growth and reduced export demands could facilitate delays in the construction of facilities scheduled for later in the decade. Lost revenues from the canceled 1,000 mw Grand Baleine contract with the New York Power Authority are
expected to be somewhat offset by the postponement of investment in new plant, but will likely pressure Hydro-Quebec's domestic rates for several years when the New York load was to have been served from resources already in place.
Hydro-Quebec is a corporation owned entirely by the government of the Province of Quebec. Principal and interest payments on Hydro- Quebec's debt are guaranteed by the province. -0- 9/10/93 /CONTACT: William A. Abrams, CFA, of Duff & Phelps Credit Rating Co., 312-368-3112/
CO: Hydro-Quebec ST: Quebec IN: OIL SU: RTG
MP -- NY037 -- 0753 09/10/93 12:45 EDT
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|Date:||Sep 10, 1993|
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