DUFF & PHELPS: SOUTHWESTERN BELL TELEPHONE $200 MILLION 7-5/8 PCT. NOTES DUE 2023 RATED 'A+'; $150 MILLION 6-1/8 PCT. NOTES DUE 2000 RATED 'A+'
CHICAGO, Feb. 23 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of A+' (Single-A-Plus) to Southwestern Bell Telephone's (SWBT) planned issuance of $200 million of 7-5/8 percent notes due 2023 and $150 million of 6-1/8 percent notes due 2000. Proceeds from the offerings will be used to refinance $450 million of 9-5/8 percent bonds due 2019 that are being called for redemption on March 19. The balance of the principal redemption amount will be financed with medium-term notes, also rated A+' (Single-A-Plus). Southwestern Bell Telephone demonstrated much improved financial performance in 1992 as a result of good revenue growth, stringent cost controls, and a significant reduction in interest expense. Pretax interest coverage improved sharply to 4.3 times. Internal funds should provide nearly all of projected capital expenditures, even with a 100 percent dividend payout. 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. The proposed rate cut would equal 1 percent of Southwestern Bell Telephone's total revenues and 9 percent of net income. Additionally, the refund would increase funding requirements and interest expense. Southwestern Bell Telephone provides local telecommunications services to 12.4 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- 2/23/93 /CONTACT: James J. Stork of Duff & Phelps, 312-368-3125/ (SBC)
CO: Southwestern Bell Telephone Co. ST: Missouri IN: TLS SU: RTG
CK -- NY053 -- 9411 02/23/93 12:23 EST
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|Date:||Feb 23, 1993|
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