DUFF & PHELPS: IOWA-ILLINOIS GAS AND ELECTRIC CO. $10 MILLION PREFERENCE STOCK RATED 'A'; $100 MILLION FIRST MORTGAGE BONDS (SHELF) RATED 'AA-'
CHICAGO, Sept. 29 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A' (Single-A) to Iowa-Illinois Gas and Electric Company's (IWG) proposed offering for $10 million of no par, preference stock. A rating of `AA-' (Double-A-Minus) has been assigned to the company's shelf registration for $100 million of first mortgage bonds. Proceeds will be used to redeem preference shares, retire short- and long-term debt and for general corporate purposes. IWG has good fundamentals with potential for modest improvement. Although sales growth has been somewhat slower than anticipated, IWG operates in a relatively stable service territory and achieves healthy levels of income from diversified activities. Coverages have come under pressure due to increased operating and maintenance costs at the Quad- Cities Nuclear Station, of which IWG owns 25 percent. IWG's common dividend payout ratio is high for the company's current rating; the company has indicated that it will maintain the dividend at its current level. On July 21, the Illinois Commerce Commission authorized rate increases of $9.6 million (8.6 percent) for electric and $2 million (3.7 percent) for gas in Illinois. Recently, the Iowa Utilities Board (IUB) has authorized a $6.8 million temporary electric rate increase. This increase, which is subject to refund and must be approved by the IUB before becoming final, must be finalized by early 1994. Medallion Production Company, IWG's oil and gas operation under its InterCoast Energy Company subsidiary, recently acquired DKM Resources for approximately $50 million. The purchase more than doubles Medallion's oil and gas reserve base. Investments in oil and gas properties, continue to add risk to the company's core utility operations. Servicing a territory in eastern Iowa and northwestern Illinois, IWG provides electric service to more than 197,000 customers and natural gas to 238,000 customers. -0- 9/29/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (IWG)
CO: Iowa-Illinois Gas and Electric Company ST: Iowa, Illinois IN: UTI SU: RTG
CK -- NY085 -- 7021 09/29/93 18:00 EDT
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|Date:||Sep 29, 1993|
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