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DUFF & PHELPS UPGRADES ARIZONA PUBLIC SERVICE COMPANY FIRST MORTGAGE BONDS RAISED TO 'BBB+'; REMOVED FROM RATING WATCH FAVORABLE

 CHICAGO, April 19 /PRNewswire/ -- Duff & Phelps Credit Rating Co. announced today that it has raised the rating on Arizona Public Service Company's (APS) outstanding first mortgage bonds to "BBB+" (Triple-B-Plus) from "BBB" (Triple-B). The "BBB+" (Triple-B-Plus) rating also applies to APS' recent shelf registration for $250 million of first mortgage bonds and the $150 million of previously registered but unissued, first mortgage bonds. APS' preferred stock is reaffirmed at "BBB-" (Triple-B-Minus). Both securities are removed from Rating Watch -- Favorable. The PVNGS Funding Corporation secured lease obligation bonds, currently rated "BBB-" (Triple-B-Minus) and on Rating Watch -- Unfavorable, are unaffected by this action.
 The new "BBB+" rating reflects an expectation of continued financial improvement at APS. The company's positive achievements in 1992 are reflective of the concerted company-wide effort to improve its financial health. Constraint of capital expenditures, refinancings of higher cost debt, and sales gains, will contribute to ongoing improvement in credit quality. The new rating takes into account the expectation of continued retention of earnings at APS; little or no near term growth in dividends to parent Pinnacle West Capital Corporation is anticipated.
 Benefits from effective cost control programs should also benefit the company. Significant achievements have been made in controlling operating and maintenance expenditures at the Palo Verde nuclear plant, of which Arizona Public Service is the operator, and in which it owns a 29 percent interest.
 Arizona Public Service Company, the principal subsidiary of Pinnacle West Capital Corporation, provides electric service to approximately 45 percent of the population of Arizona, including major portions of the Phoenix metropolitan area.
 -0- 4/19/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/
 (PNW)


CO: Arizona Public Service Company; Pinnacle West Capital Corporation ST: Arizona IN: UTI SU: RTG

TS -- NY111 -- 7599 04/19/93 16:35 EDT
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Publication:PR Newswire
Date:Apr 19, 1993
Words:300
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