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DUFF & PHELPS: MASSACHUSETTS ELECTRIC COMPANY $20 MILLION PERPETUAL PREFERRED STOCK RATED 'A+' (PARENT: NEW ENGLAND ELECTRIC SYSTEM)

 CHICAGO, Aug. 3 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of "A+" (Single-A-Plus) to Massachusetts Electric Company's offering for $20 million of perpetual preferred stock. Proceeds will be used to refund outstanding preferred stock and for other general corporate purposes.
 Massachusetts Electric maintains a conservative capital structure aided by equity contributions, as needed, from its parent, New England Electric System (NES). Generating capacity is provided by its affiliate, New England Power, under an all-requirements contract. Rates thereunder are set by the Federal Energy Regulatory Commission. Construction expenditures related to improvements and additions to Massachusetts Electric's distribution system are expected to require some external financing over the next few years. The increased capital base will continue to require supportive regulatory treatment to maintain the currently satisfactory level of credit protection measures.
 NES took a $14 million after-tax charge (Massachusetts Electric's portion was $9 million) during the second quarter associated with clean- up costs of three previously owned natural gas manufacturing sites. This action followed a decision by the U.S. Court of Appeals in May affirming that NES and two of its subsidiaries (one being Massachusetts Electric) were liable for site investigation and remediation. NES has identified 34 similar sites of which NES and its subsidiaries may potentially be jointly liable for site investigation and remediation. Although it is too early to comprehend the extent of Massachusetts Electric's financial accountability involving these site clean-ups, it is probable that the company and/or its parent will incur some level of responsibility for these costs in the future. It is expected that most such costs would be recoverable through rates.
 Massachusetts Electric Company, a wholly owned subsidiary of the New England Electric System, is engaged primarily in the distribution and sale of electricity at the retail level. The company's service territory covers approximately 41 percent of the area of the state of Massachusetts.
 -0- 8/3/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/
 (NES)


CO: Massachusetts Electric Company ST: Massachusetts IN: UTI SU: RTG

SH -- NY082 -- 9018 08/03/93 15:45 EDT
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Publication:PR Newswire
Date:Aug 3, 1993
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