Printer Friendly

DUFF & PHELPS ASSIGNS NEW 'A-' RATING TO COMMONWEALTH GAS COMPANY'S FIRST MORTGAGE BONDS

 CHICAGO, April 6 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned an initial rating of `A-' (Single-A-Minus) to Commonwealth Gas Company's existing first mortgage bonds. Approximately $64 million of bonds are currently outstanding.
 The rating recognizes Commonwealth Gas' balanced capital structure, stable service territory, and sound operating fundamentals. The company's customer and throughput base is primarily residential and commercial so that the threat of load loss due to alternative fuel competition is low. Expectations for fairly low levels of new building construction and relatively high market saturation restrict future sales growth potential. Commonwealth Gas has a solid market with moderate growth characteristics.
 Commonwealth Gas has maintained a conservative capital structure balanced about evenly between debt and common stock, with additional equity infused from parent Commonwealth Energy System as needed. Earnings volatility has been influenced largely by weather as Commonwealth Gas does not have a weather adjustment mechanism. Results in 1992 have benefited from a rate increase authorized in late 1991 and a weather-related rise in firm gas sales. Commonwealth Gas is taking steps to further reduce costs.
 Capital expenditures have increased for upgrading of the distribution system. Ongoing capital expenditures, largely for system improvement, are expected to be funded 50 percent from internal cash before capital infusions from the parent.
 A major regulatory issue facing Commonwealth Gas is implementation of FERC Order 636. A portion of firm sales contracts with two major pipeline suppliers has been converted to transportation. Short-term gas supply contracts are being used pending a final FERC order on the pipelines' restructuring proposals (expected later this year). External gas supply sources are supplemented by liquid natural gas and storage facilities of affiliate Hopkinton LNG. The establishment of a satisfactory, more permanent gas supply plan is viewed as important to the maintenance of the company's credit protection measures.
 Commonwealth Gas Company distributes natural gas to 228,000 customers in eastern, southeastern, and central Massachusetts. Worcester (the state's second largest city), New Bedford, Cambridge, and Plymouth are among the 49 communities served.
 -0- 4/6/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/


CO: Commonwealth Gas Company ST: Massachusetts IN: UTI SU: RTG

SM -- NY050 -- 3465 04/06/93 13:17 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 6, 1993
Words:367
Previous Article:/C O R R E C T I O N -- CIRO, INC./
Next Article:MICROSOFT NAMES BARRISTER INFORMATION SYSTEMS CORPORATION AS SOLUTIONS CHANNEL PARTNER
Topics:


Related Articles
DUFF & PHELPS RATES SOUTHERN CALIFORNIA GAS COMPANY'S $125 MILLION FIRST MORTGAGE BONDS 'A+'
DUFF & PHELPS RATES NORTHERN ILLINOIS GAS COMPANY'S PROPOSED $50 MILLION FIRST MORTGAGE BONDS 'AA+'
DUFF & PHELPS RATES SOUTHERN CALIFORNIA GAS COMPANY'S NEW COMMERCIAL PAPER PROGRAM DUFF 1+
DUFF & PHELPS RATES SOUTHERN CALIFORNIA GAS COMPANY'S NEW COMMERCIAL PAPER PROGRAM DUFF 1+
DUFF & PHELPS CREDIT RATING CO. RATES NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY'S NATURAL GAS FACILITIES REFUNDING REVENUE BONDS 'A' (COLLATERALIZED...
DUFF & PHELPS CREDIT RATING CO. ASSIGNS 'A' TO MICHIGAN CONSOLIDATED GAS COMPANY'S PROPOSED FIRST MORTGAGE BOND OFFERING
DUFF & PHELPS CREDIT RATING CO. ASSIGNS NEW RATING TO SCANA CORPORATION'S MEDIUM-TERM NOTE PROGRAM
DUFF & PHELPS CREDIT RATING CO. UPGRADES MICHIGAN CONSOLIDATED GAS COMPANY'S FIRST MORTGAGE BONDS TO 'A+'
DCR Reaffirms Ratings of Northwest Natural Gas Company
DCR Reaffirms Southern Union Company; Establishes Rating for Assumed Secured Debt.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters