DUFF & PHELPS DOWNGRADES CINCINNATI BELL TELEPHONE COMPANY SENIOR DEBT TO 'AA-'
CHICAGO, July 20 /PRNewswire/ -- Duff & Phelps Credit Rating Co. announced today that it has lowered the rating of the senior notes and debentures of Cincinnati Bell Telephone Company (CBT) from "AA+" (Double-A-Plus) to "AA-" (Double-A-Minus). Separately, the debt of Cincinnati Bell Inc. (CBI), CBT's parent, has been reaffirmed at "A" (Single-A). The downgrade of CBT stems from continued earnings deterioration. A long-anticipated rate case was filed in May 1993, after several postponements. The company is asking for a $17 million rate increase, and has proposed funding additional capital expenditures if its earned return rises above a preset level. This is CBT's first rate case since 1985 and the first under a new Ohio law which allows for alternative methods of regulation. However, CBT's earnings have dropped well below previous expectations. Therefore, the pending rate case is not likely to result in a financial profile consistent with CBT's previous rating. Cincinnati Bell Inc.'s non-regulated subsidiaries continue to make progress toward improved profitability. In particular, MATRIXX Marketing, a marketing services company which is profitable in the U.S. but operating at a loss outside the U.S., is expected to turn around its international operations. Cincinnati Bell Information Systems (CBIS) is CBI's information management and software services subsidiary. CBIS's backlog remains large and combined with planned cost reductions as a result of a restructuring announced in the fourth quarter of 1992, should lead to improved profitability. Because of the favorable trend at CBI's non-regulated operations, the rating of the senior debt of CBI, which was lowered to "A" (Single-A) last December, has been reaffirmed. CBT is the primary subsidiary of CBI and provides local telecommunications services to 838,000 access lines in the greater Cincinnati metropolitan area, which encompasses a portion of Kentucky and Indiana. Besides CBIS and MATRIXX Marketing, Cincinnati Bell conducts non-regulated businesses through four other subsidiaries: Cincinnati Bell Long Distance, Cincinnati Bell Supply, Cincinnati Bell Directory, and Cincinnati Bell Cellular Systems, a joint venture with Ameritech. -0- 7/20/93 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125/ (CSN)
CO: Cincinnati Bell Telephone Company ST: Ohio IN: TLS SU: RTG
TS -- NY052 -- 6770 07/20/93 11:43 EDT
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|Date:||Jul 20, 1993|
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