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DUFF & PHELPS RATES CAROLINA TELEPHONE & TELEGRAPH COMPANY DEBENTURES

    CHICAGO, Aug. 5 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of 'AA+' (Double-A-Plus) to Carolina Telephone & Telegraph Company's (CTT) $50 million offering of 5 3/4 percent debentures due August 15, 2000, and its $50 million offering of 6 3/4 percent debentures due August 15, 2013.  Both issues are noncallable. The 5 3/4 debentures were priced at 99.4 to yield 5.856 percent and the 6 3/4 percent debentures were priced at 99.165 to yield 6.827 percent. Proceeds will be used to refinance long-term debt and reduce short-term debt balances.
    Carolina Telephone & Telegraph generates excellent pretax interest coverage, strong internal funds generation, and has moderate financial leverage in the capital structure.  Although the North Carolina Utilities Commission is one of the few commissions which has not adopted a form of alternative regulation for telephone companies, the regulatory environment has generally been balanced with due consideration to capital recovery.  Because of its low cost operations and the rural nature of its service territory, CTT is well positioned to meet increasing competition.  Negatively, the company generates a high proportion of its revenues from toll and network access service, which are subject to greater near-term competition.  The rating incorporates an expectation that the company will not upstream cash (beyond its normal dividend policy) to its parent to support Sprint's non-telephone operations.
    Carolina Telephone & Telegraph is a wholly owned subsidiary of Sprint Corporation.  CTT provides service in all or parts of the 50 eastern-most counties in North Carolina.  At the end of 1992, CTT's 862,841 access lines represented approximately one quarter of all lines in the state.
    -0-             08/05/93
    CONTACT:  James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125 CO:  CAROLINA TELEPHONE & TELEGRAPH COMPANY IN:  TLS SU:  RTG ST:  IL


-- NY096 -- X409 08/05/93
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Publication:PR Newswire
Date:Aug 5, 1993
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