DUFF & PHELPS RATES CONSOLIDATED NATURAL GAS COMPANY'S DEBENTURES 'AA-'
CHICAGO, Dec. 8 /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 6 5/8 percent debentures due December 1, 2013. The securities are being sold from a $250 million shelf registration. Proceeds will be used for the retirement of short-term debt incurred for the redemption of debentures. Consolidated Natural Gas Company's (CNG) credit protection measures have strengthened in 1993. External factors such as weather and natural gas pricing, which pressured financial results in recent years, have been improving on a relative basis. Management initiatives including last year's 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. Gas supply contracts have been reassigned to the local distribution company units from the transmission subsidiary, although these contracts are still subject to regulatory review. CNG's flexibility is enhanced by access to major gas producing basins in the U.S. and Canada via interconnections with major interstate pipelines. 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. While the recent drop in oil prices could have some adverse impact on earnings growth, CNG's production mix is more heavily weighted toward natural gas. -0- 12/8/93 /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
LG -- NY088 -- 1864 12/08/93 15:10 EST