DUFF & PHELPS: ILLINOIS POWER COMPANY $100 MILLION SERIAL PREFERRED STOCK (SHELF) RATED 'BB+'
CHICAGO, May 14 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `BB+' (Double-B-Plus) to Illinois Power Company's shelf registration for $100 million of serial preferred stock. Proceeds will be used to redeem outstanding securities. Illinois Power received approval from the Illinois Commerce Commission (ICC) to pay declared common and preferred dividends through the second quarter of 1994, in the event that required write-offs leave the company with a negative retained earnings balance. An August 1992 ICC rate order, if upheld, would require write-offs of approximately $200 million relating to accumulated deferred costs for the Clinton nuclear plant. Write-offs of this magnitude would deplete the retained earnings account, from which dividends are paid. The 1992 rate order has been appealed to the Illinois Appellate Court. A decision before the third quarter of 1993 is unlikely. The ICC's dividend payment approval reduces risk near term. In the interim, the company should be able to accumulate retained earnings sufficient to offset possible write-offs and enable long-term dividend stability. This assumes a continuation of strong cash flow, tight cost controls, and manageable construction expenditures to restore financial fundamentals as expected. Illinois Power Company is the second largest electric utility in the state of Illinois, with a service territory extending 15,000 square miles in the northern, central and southern portions of the state. -0- 5/14/93 /CONTACT: William A. Abrams, CFA of Duff & Phelps Credit Rating Co., 312-368-3112/ (IPC)
CO: Illinois Power Company ST: Illinois IN: UTI SU: RTG
WB -- NY080 -- 8799 05/14/93 16:49 EDT
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|Date:||May 14, 1993|
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