EL PASO ELECTRIC RATING DOWNGRADE BY DUFF & PHELPS
EL PASO ELECTRIC RATING DOWNGRADE BY DUFF & PHELPS CHICAGO, Dec. 30 /PRNewswire/ -- Duff & Phelps Credit Rating Co.
today lowered the rating of El Paso Electric Company's first mortgage bonds to 'CCC' (Triple-C) from 'BB' (Double-B), and the Del Norte Funding Corp. secured lease obligation bonds to 'DD' (defaulted debt) from 'BB-' (Double-B-Minus).
The first mortgage bonds remain on Rating
Watch -- Unfavorable. The preferred stock rating is affirmed at 'DP' (preferred stock with dividend arrearages).
The downgrades follow further deterioration in El Paso Electric's attempts to complete a comprehensive financial restructuring. Last week all beneficiaries drew on their letter of credit positions in connection with El Paso Electric's sale-leaseback of Palo Verde Unit 2. El Paso Electric is obligated to reimburse the funding banks of the letters of credit shortly. As a result of these developments, El Paso Electric has stated that the restructuring plan it was attempting to complete cannot be finalized as structured and within the time frame anticipated. In addition to other debt maturities, the company has lease payments on Palo Verde Unit 3 due in early January. El Paso Electric announced that it does not expect to be able to make the scheduled lease payments given the delay in the restructuring. The company's $150 million revolving credit facility and $5.7 million fuel oil trust were extended through Dec. 31. Without new financing and extensions or modifications of existing credit agreements, El Paso Electric will not be able to meet its obligations as they come due or the reimbursement obligations to the funding banks of the letters of credit. -0- 12/30/91 /CONTACT: William A. Abrams of Duff & Phelps, 312-368-3112/ (ELPA) CO: El Paso Electric Company ST: Illinois IN: UTI SU: RTG
CK -- NY025 -- 5642 12/30/91 12:22 EST
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|Date:||Dec 30, 1991|
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