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K N ENERGY DEBT, PREFERRED RAISED TO 'A,' COMMERCIAL PAPER TO 'F-1' BY FITCH -- FITCH FINANCIAL WIRE --

 K N ENERGY DEBT, PREFERRED RAISED TO 'A,'
 COMMERCIAL PAPER TO 'F-1' BY FITCH -- FITCH FINANCIAL WIRE --
 NEW YORK, April 16 /PRNewswire/ -- K N Energy, Inc.'s (KNE) $116 debentures and $7 preferred stock are raised to 'A' from 'A-' by Fitch. Its commercial paper is raised to 'F-1' from 'F-2.' The credit trend is improving.
 Fitch expects KNE's operating and financial performance to continue the improvement experienced in recent years. Management has successfully reduced business risk and positioned KNE to compete more effectively. The 1991 sale of coal operations and a renewed focus on the core natural gas business will result in generally stronger and more predictable credit fundamentals in the near future. Pretax interest coverage has climbed to 3.05 times (x) in 1991 from 2.79x in 1990 and 2.54x in 1989. Further moderate improvement is expected in the next several years. KNE's balance sheet is considerably stronger than in the late 1980s when common equity was below 40 percent of capitalization. At Dec. 31, 1991, common equity was 47 percent of capitalization, down modestly from 50 percent in 1990.
 Looking ahead, management is committed to maintaining a conservative financial profile. Increased throughput should result from ongoing system enhancements and aggressive marketing. There will be moderate financial pressure in 1992 as capital expenditures peak, especially if the planned $48 million purchase of Panhandle's Wattenberg gas gathering and gas delivery system is completed. This acquisition offers some synergistic long-term benefits to the system. However, Fitch anticipates continuation of a strong financial profile and ample liquidity regardless of whether the purchase is completed.
 KNE is subject to ongoing litigation with Freeport-McMoRan, Inc., and Teachers Insurance and Annuity Association regarding matters pertaining to a gas purchase contract. Damages claimed by the plaintiffs exceed $200 million. KNE asserts that it has meritorious defenses to this litigation, that it is adequately reserved for all litigation, and that resolution of outstanding cases will not have a material adverse effect on the company. KNE's attorneys, including outside counsel, have indicated to Fitch that they agree with management's position.
 -0- 4/16/92
 /CONTACT: Ralph Pellecchia, 212-908-0586, or Leah Murch, 212-908-0511, both of Fitch/
 (KNE) CO: K N Energy Inc. ST: Colorado IN: OIL SU: RTG


CK -- NY040 -- 9187 04/16/92 10:36 EDT
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Publication:PR Newswire
Date:Apr 16, 1992
Words:381
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