DUFF & PHELPS LOWERS HAWAIIAN ELECTRIC INDUSTRIES, INC. MEDIUM-TERM NOTES TO 'BBB+'
CHICAGO, Feb. 26 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has lowered the rating of Hawaiian Electric Industries, Inc.'s (HEI) medium-term notes to BBB+' (Triple-B-Plus) from A-' (Single-A-Minus) and removed the securities from Rating Watch -- Unfavorable. HEI's commercial paper rating of Duff 1- (One-Minus) is reaffirmed. The downgrade action stems from the increasing uncertainty surrounding HEI and its decision to cease operations at its insurance subsidiary Hawaiian Insurance & Guaranty Company, Limited (HIG) in December 1992. The extent of additional financial responsibility ultimately required, if any, is unknown. However, the pending situation adds new risk, not reflected in the prior rating. The ratings of HEI's primary subsidiary Hawaiian Electric Company (HECO) are reaffirmed. Duff & Phelps assumes that the distinct separation between utility and nonutility businesses will continue. Therefore, the insurance related risks faced by HEI do not transfer to HECO. HECO has maintained a good balance sheet structure. The regulatory environment is improving, albeit it slowly. The Hawaii Public Utilities Commission has recognized HECO's purchased power obligations. Supportive regulation must continue for HECO to attract the capital necessary for its large construction program. Hawaiian Electric Industries is the holding company for subsidiaries engaged in the electric utility, financial service, freight transportation, and real estate development businesses. The utility business, represented by Hawaiian Electric Company and subsidiaries Maui Electric Company, Limited and Hawaii Electric Light Company, Inc. provides three-fourths of consolidated operating income. The major non-utility subsidiary is American Savings Bank which has performed well. -0- 2/26/93 /CONTACT: William A. Abrams, CFA of Duff & Phelps Credit Rating Co., 312-368-3112/ (HE)
CO: Hawaiian Electric Industries, Inc. ST: Hawaii IN: UTI SU: RTG
TS -- NY059 -- 1012 02/26/93 16:51 EST
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|Date:||Feb 26, 1993|
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