DUFF & PHELPS RATES ENRON SENIOR DEBT 'BBB'
CHICAGO, Feb. 25 /PRNewswire/ -- The Duff & Phelps Credit Rating Co. has assigned a rating of BBB' (Triple-B) to the outstanding senior notes of Enron Corp (NYSE: ENE). The company's senior subordinated debentures have been assigned a rating of BBB-' (Triple-B-Minus) and its convertible preferred stock a rating of BB+' (Double-B-Plus). About $3.3 billion of securities are affected by the rating. The rating reflects Enron's position as one of the premier natural gas companies in the United States. Traditional areas, such as interstate pipeline operations, are buttressed by newer growth businesses, such as gas marketing and cogeneration. While earnings from Enron Oil and Gas are sensitive to changing natural gas prices, Enron's business mix provides some protection from such shifts in natural gas pricing as Enron Liquid Fuels, which uses gas as a feedstock, benefits from lower natural gas prices. Enron Gas Services has evolved into the major gas marketing company in the United States by providing a broad range of brokerage and other services to producers and end-users. Following its analysis of Enron's gas marketing operations D&P concluded that financial risks are appropriately monitored and contained in the operation. The gas marketing operations and its attendant risks will continue to be monitored by Duff & Phelps. Enron has strengthened its financial profile by reducing debt through a combination of asset sales, free cash flow and the proceeds from the sale of common equity in the second quarter of 1992. At the end of 1992, Enron's debt-to-total capital was 47.4 percent; by including such commitments as operating leases on liquids processing assets and on Enron's headquarters, the fixed obligation ratio increases to the mid-50 percent range. Fixed charge coverage, as calculated by Duff & Phelps, is estimated to have approached 2.0 times in 1992, up from the 1991 level of 1.6 times. Further improvement is likely as interest expense comes down due to refunding of high cost debt and through continued operating earnings improvement. -0- 2/25/93 /CONTACT: David W. Eisinger of Duff & Phelps Credit Rating Co., 312-368-3145/ (ENE)
CO: Enron ST: Texas IN: OIL SU: RTG
TM -- NY088 -- 0560 02/25/93 16:35 EST
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|Date:||Feb 25, 1993|
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