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GULF STATES ON FITCHALERT POSITIVE, ENTERGY UNITS AFFIRMED -- FITCH FINANCIAL WIRE --

 GULF STATES ON FITCHALERT POSITIVE, ENTERGY UNITS AFFIRMED
 -- FITCH FINANCIAL WIRE --
 NEW YORK, June 9 /PRNewswire/ -- Gulf States Utilities Co.'s (GSU) "BBB-" senior debt, "BB+" debentures, and "CCC" preferred stock are placed on FitchAlert with positive implications, it was announced today. GSU's ratings may be upgraded in the near future in light of its improving fundamentals on a stand alone basis and is not based on the company's proposed merger with Entergy Corp.
 Separately, Entergy unit securities are affirmed after yesterday's announcement of the planned merger. The transaction, which calls for an exchange of stock or cash, is not expected to have a measurable impact on the debt ratings of the combined company for the foreseeable future.
 GSU's financial situation is benefiting from reduced interest expense due to a significant amount of debt retirements, as well as increased sales, rate hikes, and management's continuing attention to controlling costs. Certain regulatory issues related to the River Bend nuclear plant have also been resolved and the company is now paying preferred dividends.
 Fitch rates four Entergy Corp. subsidiaries: Arkansas Power & Light Co. ("BBB" senior debt, "BBB-" preferred stock), Louisiana Power & Light Co. ("BBB" senior, "BBB-" preferred), Mississippi Power & Light Co. ("BBB" senior, "BBB-" preferred), and New Orleans Public Service Co. ("BBB-" senior, "BB+" preferred). All four units have improving credit trends.
 The proposed merger should allow both entities greater operational flexibility and provide substantial cost savings. The combination would offer increased generating capacity, a well developed transmission system, and fuel diversity. These should enable the merged companies to lower rates through fuel savings, retain existing customers, and provide a greater opportunity for off-system sales.
 Terms of the proposed $2.3 billion merger call for GSU shareholders to receive $20 in cash or Entergy common stock for each of their shares. As part of the agreement, GSU's rates will be frozen for five years. Ratepayers are expected to benefit from the estimated $600 million in fuel savings over a ten-year period.
 Although the company has estimated that the merger may be consummated in 12-18 months, the necessary approvals of state and federal agencies may prolong the time frame. The recent merger between Kansas Power & Light Co. and Kansas Gas & Electric Co. took 17 months.
 -0- 6/9/92
 /CONTACT: Ed King, 212-908-0574, or Stephen Fedun, 212-908-0568, both of Fitch/
 (GSU) CO: Gulf States Utilities Co. ST: Louisiana IN: OIL SU: RTG


TS -- NY039 -- 8372 06/09/92 12:29 EDT
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Publication:PR Newswire
Date:Jun 9, 1992
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