DUFF & PHELPS: THE EMPIRE DISTRICT ELECTRIC COMPANY $80 MILLION (SHELF) FIRST MORTGAGE BONDS RATED 'AA-' CUMULATIVE PREFERRED STOCK RATED 'A+'
CHICAGO, Aug. 4 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned ratings to Empire District Electric Company's shelf registration for $80 million of first mortgage bonds and/or cumulative preferred stock. The first mortgage bond portion is rated `AA-' (Double-A-Minus) and the cumulative preferred stock portion is rated `A+' (Single-A-Plus). Proceeds will be used to provide funds for construction, refinance outstanding debt, and for other general corporate purposes. Empire District has a conservative capital structure and competitive rates. The company continues to trim expenses and develop organizational efficiencies. Sales growth is expected to continue to be relatively strong, especially in the Branson, Missouri area. Most of this expected customer growth is due to new entertainment and recreational facilities as well as accompanying residential development. The company has also mitigated its exposure to Clean Air legislation by switching to low-sulfur coal. Empire District's reliance on purchased power has increased in recent years, as expected. The company has used inexpensive, intermediate-term contracts for purchased power largely as a bridge until construction of its own generating facilities is completed. The power contracts do not require minimum energy takes. The company's construction program includes new transmission, distribution and generation facilities; it plans to install combustion turbine units in 1995 and 1997. The company also is considering various options for the addition of base load generating capacity around the turn of the century. Projected construction expenditures are manageable, but will require some external new money financing. Sales of equity are expected to control debt leverage. Future rate relief needs should be relatively modest. The company's credit fundamentals are expected to remain strong. Empire District provides electric service to over 127,000 customers in a 10,000 square mile territory including southwest Missouri, southeast Kansas, northeast Oklahoma, and northwest Arkansas. The company maintains a network of more than 1,200 miles of transmission lines, which interconnect with nine other utilities at 17 points. -0- 8/4/93 /CONTACT: William A. Abrams, CFA of Duff & Phelps Credit Rating Co., 312-368-3112/
CO: The Empire District Electric Company ST: New York IN: UTI SU: RTG
LD -- NY088 -- 9572 08/04/93 17:24 EDT