DUFF & PHELPS: ILLINOIS POWER COMPANY $235 MILLION "NEW MORTGAGE BONDS" RATED 'BBB'
CHICAGO, Feb. 18 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of BBB' (Triple-B) to Illinois Power Company's issuance of $235 million 8 percent "new mortgage bonds" due Feb. 15, 2023. The bonds were priced to yield 8.089 percent. This is the first issuance of new mortgage bonds under a new indenture. A like amount of first mortgage bonds will be pledged as collateral for the new mortgage bonds and will remain pledged until all outstanding first mortgage bonds are retired. Provisions under the new indenture will ultimately provide the company more flexibility than the existing first mortgage indenture. Provisions of the first mortgage indenture remain in effect while first mortgage bonds are outstanding. Illinois Power's credit protection measures have improved in recent years. This reflects management's control of expenses, refunding and retirement of higher cost debt and preferred stock, and rate increases. Continued improvement is anticipated as strong cash flow and manageable construction requirements minimize the need for external financing. An August 1992 Illinois Commerce Commission (ICC) rate order, which would require write-offs of approximately $200 million relating to accumulated deferred costs for the Clinton nuclear plant, causes uncertainty. Due to the possible impairment of retained earnings and therefore of the ability to pay preferred dividends, Illinois Power's preferred stock remains on Rating Watch -- Unfavorable. The company has appealed the order. The company has declared preferred dividends through the first quarter of 1994. The ICC approved payment of the first quarter 1993 dividends. ICC approval has been applied for and will be necessary for future payments. 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- 2/18/93 /CONTACT: John C. Dell of Duff & Phelps, 312-368-3161/ (IPC)
CO: Illinois Power Company ST: Illinois IN: UTI SU: RTG
WB -- NY053 -- 7890 02/18/93 12:18 EST
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|Date:||Feb 18, 1993|
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