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DUFF & PHELPS RATES PUBLIC SERVICE ELECTRIC AND GAS COMPANY NOTES, BONDS AND CUMULATIVE PREFERRED STOCK

 CHICAGO, March 10 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of "A" (Single-A) to Public Service Electric and Gas Company's (PSE&G) shelf registration for $200 million of secured medium-term notes. A rating of "A" (Single-A) also has been assigned to PSE&G's proposed offering of $250 million of first and refunding mortgage bonds. A rating of "A-" (Single-A-Minus) has been assigned to the company's proposed offering of 750,000 shares of cumulative preferred stock, par value $100. Both offerings are expected shortly. Proceeds will be used primarily for refinancing.
 PSE&G continues to benefit from a strong financial profile. Rate increases stemming from the December 1992 rate settlement will provide an opportunity for modest recovery in earnings and coverages. The settlement was somewhat disappointing in that it greatly differed from PSE&G's initial request. The two major factors were a relatively low allowed return on common equity (12 percent) and a significantly lower than requested level of depreciation to be recovered through rates.
 In the near term, the company will need substantial new money financing to support its capital expenditure plans which will pressure debt protection measures. Additional equity contributions from parent Public Service Enterprise Group and cost cuts are expected. Cost control efforts will present a challenge given the concentration of operating and maintenance expense related to nuclear generation.
 PSE&G provides electric and gas service to a diverse area of New Jersey, including its six largest cities. The company owns shares in five nuclear generating units.
 -0- 3/10/93
 /CONTACT: John C. Dell of Duff & Phelps, 312-368-3112/
 (PEG)


CO: Public Service Electric and Gas Company ST: New Jersey IN: UTI SU: RTG

GK -- NY038 -- 4660 03/10/93 11:49 EST
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Publication:PR Newswire
Date:Mar 10, 1993
Words:288
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