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KANSAS G&E SECURED FACILITY BONDS RATED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --

 KANSAS G&E SECURED FACILITY BONDS RATED 'BBB+' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Sept. 18 /PRNewswire/ -- Kansas Gas & Electric Co.'s (KGE) $341.1 million secured facility bonds series 1992 are rated 'BBB+' by Fitch. The issues are: $102.7 million 6.76 percent bonds due Sept. 29, 2003, $86.3 million 7.625 percent bonds due Sept. 29, 2007, and $152.1 million 8.29 percent bonds due March 29, 2016.
 The bonds will be issued by the Connecticut National Bank, and are neither direct obligations of, nor guaranteed by KGE or its parent, Western Resources, Inc. Payment of interest and principal is secured by a lease of the La Cygne 2 coal-fired electric generating unit which unconditionally obligates KG&E to make payments sufficient to service the bonds. The rating reflects the ability of KGE, the lessee to meet its obligations under the lease agreement, as well as the sound legal structure of the transaction.
 The Connecticut National Bank, as trustee, is the lessor of the La Cygne unit. Bond proceeds will be used to refund secured facility bonds issued in 1987.
 KGE's ratings reflect consummation of a merger agreement with Western Resources, Inc. (formerly Kansas Power & Light Co.) h?ereby KGE has become a wholly owned subsidiary of Western Resources. Both KGE's and Western Resources' senior debt is rated 'A-.'
 Initially weak credit measures for the combined utility are somewhat offset by healthy cash flow and expected improvement of other bondholder protection measures. At June 30, the combined debt ratio stood at about 60 percent, compared to 48 percent at year-end 1991. Adjustment for the sale/leaseback of the La Cygne generating plant would add approximately 3 percent to the debt ratio. Pro forma pretax interest coverage is 2.34 times(x) at year-end 1992 (1.90x adjusted for sale/leaseback financing), down from 2.69x at year-end 1991.
 Capital expenditures over the next five years are expected to be over 100 percent funded with internally generated cash. Excess funds will be available to pay down debt. In addition, savings are expected from operational and structural synergies, including consolidated service operations, reduced overhead, fuel and maintenance savings, a better mix of generating sources, a more diverse electric service territory, expanded transmission sales, and improved ability to make off-system sales.
 -0- 9/18/92
 /CONTACT: Ed King of Fitch, 212-908-0574/
 (WR) CO: Kansas Gas & Electric Co.; Western Resources, Inc. ST: Kansas IN: UTI SU: RTG


CK -- NY029 -- 1062 09/18/92 11:12 EDT
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Publication:PR Newswire
Date:Sep 18, 1992
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