DUFF & PHELPS RATES PANHANDLE EASTERN PIPE LINE COMPANY'S $100 MILLION DEBENTURES 'BBB'
CHICAGO, Aug. 18 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of 'BBB' (Triple-B) to Panhandle Eastern Pipe Line Company's $100 million issue of 7.2 percent debentures due Aug. 15, 2024. Panhandle Eastern Pipe Line Company's (PEPL) financial condition has been strengthening as expected. Leverage has been reduced and should continue to show modest improvement. Parent Panhandle Eastern Corporation has provided equity support as needed. Interest coverages also have benefited from the refinancing and redemption of higher cost debt. Greater stability of cash flows and earnings is projected under the new straight fixed variable rate design mandated by FERC Order 636. This will allow PEPL to recover substantially all of its fixed costs including return on equity in a monthly demand charge. PEPL is in a favorable competitive position as connections to affiliate Texas Eastern Transmission provide access to growing Northeast markets. Elimination of certain costs related to an affiliate's LNG project from PEPL's going forward service rates further enhances PEPL's competitive position. In May, PEPL began operating under the provisions of FERC Order 636; subsidiary Trunkline Gas is expected to implement its 636-related restructured rates and services in September. Transition costs resulting from Order 636 are small relative to the companies' sizes and should be recovered under the provisions of the order. -0- 8/18/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (PEL)
CO: Panhandle Eastern Pipe Line Company ST: Texas IN: OIL SU: RTG
SM -- NY028 -- 3869 08/18/93 11:06 EDT
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|Date:||Aug 18, 1993|
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