DUFF & PHELPS: SOUTHERN CALIFORNIA EDISON COMPANY $400 MILLION FIRST AND REFUNDING MORTGAGE BONDS (SHELF) RATED 'A+'
CHICAGO, Sept. 20 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A+' (Single-A-Plus) to Southern California Edison Company's shelf registration for $400 million of first and refunding mortgage bonds. Proceeds will be used to repay or retire outstanding debt, to finance construction, and for general corporate purposes. Southern California Edison is a well-managed utility with good cash flow and rate mechanisms that help stabilize earnings and reduce regulatory lag. Construction expenditures should remain relatively level and are expected to be funded largely from internal cash. A reduction in short-term debt will improve overall debt leverage as the company recovers its Palo Verde nuclear plant rate deferrals. In Southern California Edison's last rate case the California Public Utilities Commission chose not to recognize the company's large portfolio of purchased power obligations and the necessary higher equity ratio and/or return on equity to support credit fundamentals. More recently, the commission's consumer advocacy branch recommended a 10.7 percent return on equity (the company is currently allowed 11.8 percent) for the major California electric utilities. The commission is expected to issue a final decision on this case by the end of this year. This current case and the evolving California regulatory climate will be important to Southern California Edison's future financial strength. Other risks include the company's relatively high customer rates in an increasingly competitive environment and the unstable financial strength of some of the other Palo Verde nuclear plant owners. Purchased power obligations are also quite large. Southern California Edison, the principal subsidiary of SCEcorp, provides electric service to over 4 million customers in a 50,000 square mile area of central and southern California. -0- 9/20/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (SCE)
CO: Southern California Edison Company ST: California IN: UTI SU: RTG
CK -- NY076 -- 3718 09/20/93 13:34 EDT
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|Date:||Sep 20, 1993|
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