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LILCO $56 MILLION 6.875 PERCENT PREFERRED RATED 'BBB-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 15 /PRNewswire/ -- Long Island Lighting Co.'s (LILCO) $56 million 6.875 percent preferred stock series UU due Oct. 15, 2018 is rated 'BBB-' by Fitch. The issue is a takedown from a previously rated shelf registration. The credit trend is improving. Proceeds will fully redeem $25 million principal amount of the company's 8.12 percent series J preferred stock and $30 million principal amount of its 8.30 percent series K preferred stock.
 The rating reflects the assurance of electric rate increases, with incentives, through 1993, continued aggressive refinancing of high-cost debt and preferred stock, and a significant improvement in earnings quality, cash flow, and internal cash generation over the next several years.
 The company is in the process of filing by year end an electric rate application pursuant to the 1989 settlement that contemplated a series of rate increases designed to restore its financial health. The approved rate moderation agreement (RMA) provided for two rate increases in 1989, one in 1990, and assumed targeted annual rate increases of 4.5 percent to 5.0 percent in each year for an eight-year period beginning Dec. 1, 1991.
 In 1991 the Public Service Commission (PSC) approved a multi-year rate case that increased electric rates by approximately 4.0 percent effective on Dec. 1 of each year beginning in 1991 through 1993. LILCO is currently considering the filing of a multi-year electric rate plan for annual percentage increases that are significantly below the targeted levels contemplated by the RMA settlement to reflect significant reductions in interest rates, inflation, real property taxes, and operating, maintenance, and capital expenditures.
 The company also has negotiated a gas rate settlement with the staff of the PSC that reflects an administrative law judge multi-year recommendation that provides for annual increases in gas rates of $25.6 million, $23 million and $20 million in each of the next three years. A decision by the commission is expected by the end of December.
 -0- 10/15/93
 /CONTACT: Stephen Fedun of Fitch, 212-908-0568/
 (LIL)


CO: Long Island Lighting Co. ST: New York IN: UTI SU: RTG

SH -- NY029 -- 2705 10/15/93 11:37 EDT
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Publication:PR Newswire
Date:Oct 15, 1993
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