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HAWAIIAN ELECTRIC SENIOR DEBT LOWERED TO 'A-', PREFERRED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, April 22 /PRNewswire/ -- Hawaiian Electric Co.'s (HECO) $141 million first mortgage bonds are lowered to "A-" from "A+" by Fitch. Its $84 million preferred stock is lowered to "BBB+" from "A". The lower ratings reflect a very large construction program over the next five years, low internal cash generation, and dependence on regulatory support during this heavy construction period, as well as asset and fuel risk concentration. The credit trend is stable.
 Construction stress will be evident as the company enters a $1.2 billion capital expenditure program while relying on external financing for over 60 percent of its needs. Approximately 65 percent of the funds will be used for transmission and distribution facilities with the remaining 35 percent for generation. HECO will be dependent on its parent, Hawaiian Electric Industries, Inc. (HEI), for substantial new equity to maintain its healthy capitalization structure. As of Dec. 31, HECO's capital structure consisted of 11.3 percent short-term debt, 34.6 percent long-term debt, 7.9 percent preferred stock and 46.2 percent common equity. Pretax interest coverage for 1992 was 3.26 times.
 The rating also considers uncertainties associated with HEI's withdrawal from the insurance business due to claims exceeding $300 million caused by Hurricane Iniki in September 1992. A resulting lawsuit filed by the Insurance Commissioner of the State of Hawaii seeks monetary damages. The insurance commissioner has estimated that the former insurance subsidiary has a deficiency of $68 million. HEI believes it has a very strong defense to the lawsuit. Fitch is of the opinion that HEI has sufficient financial flexibility and resources to provide HECO with the necessary equity funds to maintain financial integrity.
 Although HECO and its subsidiaries Maui Electric Co. and Hawaii Electric Light Co. will be highly dependent on rate relief to support the heavy construction program, recent regulatory decisions have been encouraging. In HECO's last rate case, the Hawaiian Public Utilities Commission issued a final order, including interim rates, in 11 months, compared to more than 22 months for the previous proceeding. It also permitted a 13 percent rate of return on common equity and full recovery of purchase power costs. The commission also acknowledged HECO's increased business risk by stating that the adopted equity return tends to minimize deterioration in its financial profile. However, satisfactory resolutions of pending commission investigations of power outages, and the relationship between HECO and its parent company, as well as final decisions on Maui Electric's rate case and the SFAS 106 accounting change related to postretirement health care benefits, will be necessary to help assure future regulatory support.
 -0- 4/22/93
 /CONTACT: Stephen Fedun of Fitch, 212-908-0568/
 (HE)


CO: Hawaiian Electric Co. ST: Hawaii IN: UTI SU: RTG

TS -- NY037 -- 9278 04/22/93 10:06 EDT
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Date:Apr 22, 1993
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