DUFF & PHELPS: SYSTEM ENERGY RESOURCES, INC. $60 MILLION FIRST MORTGAGE BONDS RATED 'BBB'
CHICAGO, April 21 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `BBB' (Triple-B) to System Energy Resources, Inc.'s proposed offering of $60 million of first mortgage bonds from an outstanding shelf registration. Approximately $220 million of bonds remain available for sale. System Energy has strong cash flow, manageable construction, and minimal new money needs. Although leverage is relatively high, credit quality is supported by the Capital Funds agreement with parent, Entergy Corporation, and unit power sales and availability agreements with the Entergy operating companies. Under the unit power sales agreements, the operating companies are obligated to pay for System Energy's total cost of service regardless of the amount of energy supplied by the Grand Gulf nuclear plant. System Energy's sole generating unit, Grand Gulf-1, continues to operate well. The outcome of a Federal Energy Regulatory Commission (FERC) audit review of consolidated income tax accounting procedures and related rate treatment remains uncertain. If recommendations by a FERC administrative law judge are upheld and implemented, System Energy will be required to write-off approximately $95 million of Grand Gulf-1 costs, and refund about $90 million to the operating companies. System Energy provides power under the unit power sales agreement to the Entergy operating companies, including Arkansas Power & Light, Louisiana Power & Light, Mississippi Power & Light, and New Orleans Public Service. System Energy has a 90 percent interest in the 1,250 mw Grand Gulf 1 nuclear unit which began commercial operation in 1985. -0- 4/21/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (ETR)
CO: System Energy Resources, Inc. ST: IN: UTI SU: RTG
WB -- NY118 -- 9022 04/21/93 17:32 EDT
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|Date:||Apr 21, 1993|
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