DUFF & PHELPS RATES CONSOLIDATED NATURAL GAS COMPANY'S DEBENTURES 'AA-'
CHICAGO, Aug. 24 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of 'AA-' (Double-A-Minus) to Consolidated Natural Gas Company's $150 million issue of 5 3/4 percent debentures due Aug. 1, 2003. The securities are being sold from a $400 million shelf registration, also rated 'AA-'. Proceeds from this issue will be used for the redemption of outstanding senior debentures. Consolidated Natural Gas Company's (CNG) credit protection measures have strengthened recently following a period of higher capital spending, a warm heating season, and low energy prices which pressured financial results. External factors such as weather and natural gas pricing have been improving. Management initiatives including the sale of common stock, cost containment measures, and restructuring of exploration/production operations also are viewed constructively. CNG is well-positioned to experience further improvement in financial protection measures. Capitalization has been conservative. Gas distribution operations provide stability while offering additional growth opportunities, particularly in the Virginia service area. CNG's grid-like pipeline transmission system is strategically located to serve attractive gas markets along the East Coast and in the Northeast. Transmission operations should benefit from increased throughput on an expanded pipeline system. CNG appears to be in a favorable position to operate in the deregulated gas environment under FERC Order 636. Access to major gas producing basins in the U.S. and Canada via interconnections with major interstate pipelines enhances CNG's flexibility. The company's ample storage capacity should be of increasing strategic value, especially to the low load, weather-sensitive East Coast markets. With the completion of a multi-year pipeline expansion program and strengthening in natural gas prices, CNG has renewed its focus on its exploration/production operations. Increased capital spending has been directed to this area where emphasis has shifted to exploratory drilling from lower risk development drilling. While CNG has taken steps to address earnings weakness in exploration and production, this strategy is under development and the goals are still to be realized. -0- 8/24/93 /CONTACT: Lynda A. Housa of Duff & Phelps Credit Rating Co., 312-368-3156/ (CNG)
CO: Consolidated Natural Gas Company ST: Pennsylvania IN: OIL SU: RTG
SM -- NY053 -- 5494 08/24/93 13:56 EDT