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DUKE POWER $750 MILLION SENIOR DEBT RATED 'AA', PREFERRED 'AA-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, April 14 /PRNewswire/ -- Duke Power Co.'s new $750 million first and refunding mortgage bond and $165 million medium term note shelf registrations are rated 'AA' by Fitch. A $139 million preferred stock shelf is rated 'AA-'. Ratings on outstanding securities are affirmed as follows: first and refunding mortgage bonds, medium term notes and York County, S.C., pollution control facility revenue refunding bonds series 1990 'AA', preferred stock 'AA-', and commercial paper 'F-1+'. The credit trend is stable.
 The ratings reflect a well managed capital structure, constructive regulatory environment, solid generating diversity (61 percent nuclear, 37 percent coal, and 2 percent hydro and other), exceptional nuclear operations and growing, but manageable construction requirements.
 Financial performance in 1992 was adversely impacted by a one-time rate refund of about $95 million pre-tax. The refund reduced interest coverage by about 30 basis points resulting in 1992 SEC fixed charge coverage of 3.48 times(x), compared to 3.85x the prior year and a return on average common equity (ROE) of only 11 percent. Excluding the one time charge, SEC fixed charge coverage would have been a healthy 3.78x. The capital structure remained strong with 50.2 percent common equity, 9.4 percent preferred stock and only 40.3 percent debt.
 Over the next several years, higher construction expenditures and a related rise in external financing requirements will exert pressure on credit quality measures. However, given the relatively constructive rate increases granted in North and South Carolina in November 1991, substantial refinancings accomplished in 1992, and healthy cash flow, the company should earn close to its allowed ROE of 12.25 percent-12.5 percent. As a result, interest coverage should be sustainable in the 4.0x range over the next several years. Internal cash generation is forecast to provide about 80 percent-85 percent of expenditures with debt financing providing the remainder.
 Forecasted expenditures are designated for a coal plant modernization program, construction of 16 combustion turbines between 1993 and 1997, and beginning in 1995, the replacement of the steam generators at the McGuire and Catawba nuclear units. The expenditures will increase the company's net plant investment by about 10 percent annually. No new base load capacity is currently planned nor anticipated in the 1990s.
 -0- 4/14/93
 /CONTACT: Robert Hornick of Fitch, 212-908-0564/
 (DUK)


CO: Duke Power Co. ST: North Carolina IN: UTI SU: RTG

KD -- NY036 -- 5625 04/14/93 10:44 EDT
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Publication:PR Newswire
Date:Apr 14, 1993
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