DUFF & PHELPS: COMMONWEALTH EDISON COMPANY $130 MILLION FIRST MORTGAGE BONDS, DUE 1998 RATED 'BBB'
CHICAGO, March 9 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of "BBB" (Triple-B) to Commonwealth Edison Company's issuance of $130 million of 6 percent first mortgage bonds, due March 15, 1998. Proceeds will be used for general corporate purposes and refunding of existing debt. Regulatory developments and judicial decisions in Illinois have combined to significantly increase risk for Commonwealth Edison. A 1992 rate order may result in a $339 million (6 percent) rate reduction, and refunds of over $600 million (plus interest). Current rates remain in effect while the order is appealed. A decision on the rate order appeal is expected by yearend 1993. In a separate case, Commonwealth Edison's coal purchase contracts have come under scrutiny. The Illinois Commerce Commission Staff has alleged that during the 1985 through 1988 period, customers were overcharged due to high-priced coal contracts, and has recommended refunds of $280 million. This issue may not be resolved for some time.
The Illinois regulatory environment carries a ranking of V (five), the lowest (least supportive) regulatory ranking assigned by Duff & Phelps.
In response to the adverse regulatory developments, Commonwealth Edison has implemented significant cost cutting and containment measures. Workforce reductions total over 1,200 with more layoffs planned; the three-year capital budget has been slashed 10 percent. It is assumed these cutbacks can be accomplished. -0- 3/9/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (CWE)
CO: Commonwealth Edison Company ST: Illinois IN: UTI SU: RTG
TS -- NY082 -- 4670 03/09/93 16:54 EST
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|Date:||Mar 9, 1993|
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