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DUFF & PHELPS CREDIT RATING CO. UPGRADES THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF WEST VIRGINIA

 CHICAGO, Sept. 30 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has raised the ratings of the debentures of The Chesapeake and Potomac Telephone Company of West Virginia (CP-WV) from `AA' (Double-A) to `AA+' (Double-A-Plus). The rating upgrade reflects CP-WV's improved financial performance in recent years, excellent internal funds generation, and moderate financial leverage. Duff & Phelps expects maintenance of strong credit quality under the incentive regulation framework adopted by the West Virginia Public Service Commission in December 1991. Although the new regulatory plan freezes basic rates through 1994, it removes earnings constraints on competitive services. CP-WV's pretax interest coverage increased to 7.0 times in the first half of 1993 and it is expected to remain well above 6.0 times throughout the forecast period. Debt comprises 43 percent of capital following the write-off of the transition obligation for postretirement benefits and the debt ratio is expected to be lower by yearend.
 CP-WV's improved financial performance can be traced to stronger economic activity in its service territory, improved regulation, revenue growth from new services, and the company's commitment to expense control. Growth prospects have been enhanced by anticipated moves of several large federal government agencies to the service territory. As a result of job growth in service industries coupled with contraction of the mining industry, the distribution of jobs in West Virginia's economy and the state's unemployment rate have come to more closely resemble the nation's job distribution and unemployment rate in recent years. CP- WV's expense control has been driven by its modern network. At the end of 1993, the company expects to have 100 percent penetration of digital switches, signaling system seven capabilities, and Custom Local Area Signaling Services (CLASS) capabilities. CP-WV's low expense levels and modern network will help it compete successfully against companies attempting to enter its markets.
 CP-WV provides local telecommunications services to 691,000 access lines in the state of West Virginia. Local services provide 49 percent of revenues, network access 28 percent, toll services 15 percent, and directory advertising and miscellaneous services 8 percent. CP-WV is a wholly owned subsidiary of Bell Atlantic Corporation.
 -0- 9/30/93
 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125/
 (BEL)


CO: Chesapeake and Potomac Telephone Company of West Virginia ST: West Virginia IN: TLS SU: RTG

CK -- NY072 -- 7338 09/30/93 13:43 EDT
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Publication:PR Newswire
Date:Sep 30, 1993
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