Printer Friendly

INTERSTATE POWER 'A' FIRST MORTGAGE BONDS, PREFERRED AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, July 7 /PRNewswire/ -- Interstate Power Co.'s (IPC) outstanding $175 million 'A' first mortgage bonds and $38 million 'A' preferred stock are affirmed by Fitch. The credit trend remains stable.
 IPC's bondholder protection measures are weak for the rating category but should improve based on modest load growth, expected adequate rate relief by 1994 in Iowa, and the issuance of $30 million new common stock in 1995. Recent financial results have been negatively impacted by disappointing Minnesota and Iowa electric regulatory orders which sought recovery of significant new purchased power capacity costs. Additionally, Interstate has been affected by unseasonably cool and wet summer weather, substandard earnings in the gas distribution business caused by rate lag and environmental cleanup costs, and increasing capital expenditures.
 Further credit deterioration is limited by numerous aspects. Most importantly, IPC is, and will remain, price competitive in its region as electric tariffs are cost of service-based, thereby mitigating the risk of losing large industrial clients. Additionally, IPC is conservatively managed with no diversified investments, no nuclear involvement, and no baseload plant under construction or planned. Management is committed to improving its financial condition through future Iowa rate petitions and raising common equity capitalization.
 Upside potential is limited by operating characteristics that include heavy reliance on industrial sales. With an increasingly competitive electric utility marketplace, IPC is challenged to increase profitability from its sizeable business with low margin industrial customers. Further, IPC serves a rural market characterized by slow load growth in the residential segment. Negatively, IPC remains adversely affected by approximately $6 million in annual unrecovered capacity costs and low-profit gas operations. It will take time, and tight control over operating costs, for IPC to achieve sufficient growth to overcome these earnings drags.
 -0- 7/7/93
 /CONTACT: John Watt, 212-908-0523, of Fitch/
 (IPW)


CO: Interstate Power Co. ST: Iowa IN: UTI SU: RTG

LR -- NY040 -- 9057 07/07/93 11:55 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 7, 1993
Words:319
Previous Article:GOLDEN EAGLE LANDS LATIN AMERICAN IMPORTS
Next Article:SOUTHERN ELECTRIC INTERNATIONAL WINS BID IN ARGENTINA
Topics:


Related Articles
VIRGINIA ELECTRIC $370 MILLION SENIOR DEBT RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --
MASSACHUSETTS ELECTRIC 'A+' FIRST MORTGAGE BOND AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --
NARRAGANSETT ELECTRIC 'A' FIRST MORTGAGE BONDS AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --
VIRGINIA ELECTRIC $200 MILLION PREFERRED SHELF RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --
DUKE POWER $200 MILLION SENIOR DEBT SHELF RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --
FITCH AFFIRMS COLUMBUS SOUTHERN POWER DEBT, PREFERRED ON ALERT NEGATIVE -- FITCH FINANCIAL WIRE --
PUGET SOUND P&L $450 MILLION NOTE PROGRAM RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --
DUKE POWER SENIOR DEBT SHELF RATED 'AA', PREFERRED 'AA-' BY FITCH -- FITCH FINANCIAL WIRE --
PUGET SOUND P&L $450 MILLION NOTE PROGRAM RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --
MONONGAHELA POWER CO. $25 MILLION POLLUTION CONTROL BONDS RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters