DUFF & PHELPS: MINNESOTA POWER & LIGHT COMPANY $25 MILLION FIRST MORTGAGE BONDS RATED 'A'
CHICAGO, July 2 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A' (Single-A) to Minnesota Power & Light Company's proposed offering of $25 million of first mortgage bonds. Proceeds will be used to refinance outstanding first mortgage bonds. Minnesota Power & Light's utility operations are stable with coverages expected to remain at current levels. Electric operations provide over 80 percent of operating income. Electricity sales are heavily concentrated in the cyclical taconite and iron mining industries, and are expected to remain relatively flat. Long-term take- or-pay contracts with large industrial users and wholesale customers limit the company's downside risk. The electric utility's heavy reliance on the Square Butte purchased power arrangement has long been regarded as a financial obligation. No additional capacity will be needed for several years. Moderate rate relief will be needed to maintain coverages. Non-electric diversified operations generally have been structured to minimize financial risk. Major core support businesses include paper manufacturing and coal mining. Minnesota Power & Light also has diversified into the regulated water business with holdings in Florida, North Carolina, and South Carolina. Sizable capital expenditures at the water businesses will be necessary. Regulatory support for these businesses is uncertain; rate increases in Florida to date, have been insufficient. Minnesota Power & Light is a diversified utility whose primary business is providing electric service in central northeastern Minnesota. -0- 7/2/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (NWNG)
CO: Minnesota Power & Light Company ST: Minnesota IN: UTI SU: RTG
LR -- NY032 -- 8226 07/02/93 15:06 EDT
|Printer friendly Cite/link Email Feedback|
|Date:||Jul 2, 1993|
|Previous Article:||DUFF & PHELPS RATES NORTHWEST NATURAL GAS COMPANY'S MEDIUM-TERM NOTE PROGRAM|
|Next Article:||CINCINNATI BELL INC. $50 MILLION 7 1/4 PERCENT NOTES DUE 2023 RATED "A"|