DUFF & PHELPS: CHESAPEAKE & POTOMAC TELEPHONE COMPANY OF MARYLAND $200 MILLION SIX PERCENT DEBENTURES DUE 2003 RATED 'AA'
CHICAGO, April 21 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `AA' (Double-A) to Chesapeake and Potomac Telephone Company of Maryland's (CP-MD) $200 million offering of 6 percent debentures due May 1, 2003, and its $250 million offering of 7.15 percent debentures due May 1, 2023. The 6 percent debentures are non-callable and were priced at 98.30 to yield 6.231 percent to maturity. The 7.15 percent debentures are non-callable for 20 years and were priced at 98.541 to yield 7.27 percent to maturity. Chesapeake and Potomac Telephone Company of Maryland has strong interest coverage, internal cash flow that fully funds its construction program, an economically diverse service territory, and a commitment to updating its network through an accelerated modernization program. The current construction spending program should produce new revenue generating opportunities, accommodate growth, and improve profitability longer term. CP-MD benefits from incentive regulation at both the state and federal level and from rate structures that result in over half of total revenues being generated from local services. The Maryland incentive plan, which had been extended until January 1993, has been further extended for three years. The earnings sharing ranges have been increased so that now C&P-MD will be able to keep a portion of earnings up to a 16.5 percent return on equity. Negatively, the Maryland Commission ordered the company to cut rates by $29 million effective January 1993. Chesapeake and Potomac Telephone Company of Maryland, a subsidiary of Bell Atlantic, provides telecommunications services to virtually the entire state of Maryland, comprising almost three million access lines. Local services provide 52 percent of revenues, access to the networks of long distance carriers 27 percent, toll services 7 percent, and directory advertising and other miscellaneous sources provide the remaining 14 percent of revenues. -0- 4/21/93 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co. 312-368-3125/ (BEL)
CO: Chesapeake and Potomac Telephone Company of Maryland ST: Maryland IN: TLS SU: RTG
LD -- NY116 -- 9013 04/21/93 17:23 EDT
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|Date:||Apr 21, 1993|
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