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KANSAS POWER & LIGHT $50 MILLION 7.58 PERCENT PREFERRED STOCK RATED 'BBB+' -- FITCH FINANCIAL WIRE --

 KANSAS POWER & LIGHT $50 MILLION 7.58 PERCENT PREFERRED STOCK
 RATED 'BBB+' -- FITCH FINANCIAL WIRE --
 NEW YORK, April 8 /PRNewswire/ -- Kansas Power & Light Co.'s (KPL) $50 million 7.58 percent preference stock is rated "BBB+" by Fitch, it was announced today.
 The issue is the final takedown of a shelf registration. KPL's merger with Kansas Gas & Electric Co. was consummated on March 31. The credit trend is stable.
 On March 31, ratings were lowered on KPL's outstanding preferred and preference stock to "BBB+" from "AA-" and "A+", respectively. KPL's senior debt was lowered to "A-" from "AA-" and its commercial paper was lowered to "F-2" from "F-1+". Kansas Gas's senior debt, which will be assumed by KPL, was raised to "A-" from "BBB".
 KPL's ratings reflect the large amount of additional debt incurred to finance the merger and the impact of acquiring a lower rated company, with nuclear operations and an off-balance sheet lease, at a sizable premium to book value.
 Initial credit quality measures for the combined entity are weak relative to the rating category. The debt ratio immediately after the merger increased to slightly over 60 percent, compared with 48 percent at year-end 1991. Adjustment for the sale leaseback of the La Cygne generating plant adds approximately 4 percent to the debt ratio. Pretax interest coverage would be 2.34 times (x) at year-end 1992 (1.90x adjusted for sale-leaseback financing), down from 2.69x for 1991.
 The new entity will benefit from stronger cash flow and sizable cost savings that the company estimates will allow for recovery of the acquisition premium. In addition, management is committed to strengthening the balance sheet. The combined utility also possesses an excellent fuel mix, strong transmission system, efficient plant operations, and minimal acid rain exposure, all of which help offset the weakened financial profile.
 -0- 4/8/92
 /CONTACT: Ed King of Fitch, 212-908-0574/
 (KAN) CO: Kansas Power & Light Co. ST: Kansas IN: UTI SU: RTG


TS -- NY061 -- 6264 04/08/92 12:35 EDT
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Publication:PR Newswire
Date:Apr 8, 1992
Words:335
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