DUFF & PHELPS: SOUTHWESTERN BELL TELEPHONE $200 MILLION 6 3/8 PERCENT NOTES DUE 2001 RATED 'A+'
-- $150 Million 6 5/8 Percent Notes Due 2005 Rated `A+' -- CHICAGO, March 31 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A+' (Single-A-Plus) to Southwestern Bell Telephone's (NYSE: SBC) (SWBT) $200 million issue of 6 3/8 percent notes due April 1, 2001, and its $150 million issue of 6 5/8 percent notes due April 1, 2005. The 6 3/8 percent notes were priced at 99.90 to yield 6.39 percent to maturity. The 6 5/8 percent notes were priced at 99.33 to yield 6.71 percent to maturity. Both issues are noncallable. In addition to issuances from a medium-term note program, proceeds will be used to refinance its $150 million 8 1/4 percent notes due 2005 and its $300 million 8 3/4 percent notes due 2024. Southwestern Bell Telephone demonstrates good pretax interest coverage, funds its construction expenditures largely through internal funds, and has a moderate debt ratio. Pretax interest coverages are expected to improve modestly in 1993 as a result of revenues from new services and continued operating expense controls. The Oklahoma rate proceeding remains the major uncertainty. The Oklahoma Corporation Commission has issued an order calling for SWBT to lower revenues by $93 million and refund $148 million to customers. The company has appealed this decision to the Oklahoma Supreme Court. Southwestern Bell Telephone is on the threshold of stronger expected financial performance. Continued expense control and maintenance of margins in competitive services will be key factors. Southwestern Bell Telephone provides local telecommunications services to 12.8 million access lines in Texas (57 percent of lines), Missouri (17 percent), Oklahoma (11 percent), Kansas (9 percent), and Arkansas (6 percent). The company is a wholly owned subsidiary of Southwestern Bell Corporation. -0- 3/31/93 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125/ (SBC)
CO: Southwestern Bell Telephone Company ST: Missouri IN: TLS SU: RTG
TM -- NY076 -- 1717 03/31/93 17:16 EST
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|Date:||Mar 31, 1993|
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