DUFF & PHELPS: PACIFIC BELL $350 MILLION DEBENTURES DUE 2025 RATED 'AA'
CHICAGO, June 15 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `AA' (Double-A) to Pacific Bell's $350 million offering of debentures due 2025. Proceeds will be used to refinance high cost debt. Duff & Phelps expects stable financial performance from Pacific Bell under the California incentive regulation plan that combines automatic rate changes based on the rate of inflation less a 4.5 percent productivity factor with earnings sharing above a 13 percent return on invested plant. Pacific Bell's interstate rates are also regulated under a price cap plan, with a productivity factor of 3.3 percent. Although the California economy remains weak, growth in demand for new services combined with cost controls has allowed Pacific Bell to meet the productivity factors. Pacific Bell's liquidity measures are excellent, with construction spending virtually fully funded from internal sources. The proposed spin-off of wireless operations by its parent, Pacific Telesis Group, will have no impact on the credit quality of Pacific Bell. Pacific Bell will remain the primary subsidiary of a somewhat streamlined holding company. No change is planned in the management, operations, or capitalization of Pacific Bell. Pacific Bell is the second largest local telecommunications company in the United States serving 14.3 million lines in California, 78 percent of all lines in the state. Roughly 35 percent of the access lines are in Los Angeles and vicinity and another 25 percent of lines are in San Francisco and surrounding areas. -0- 6/15/93 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co. 312-368-3125/
CO: Pacific Bell ST: California IN: TLS SU: RTG
LD -- NY112 -- 2376 06/15/93 17:32 EDT
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|Date:||Jun 15, 1993|
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