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MASSACHUSETTS ELECTRIC 'A+' FIRST MORTGAGE BOND AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --

MASSACHUSETTS ELECTRIC 'A+' FIRST MORTGAGE BOND AFFIRMED BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, June 15 /PRNewswire/ -- Massachusetts Electric Co.'s $295 million 'A+' first mortgage bonds and $50 million 'A' preferred stock are affirmed by Fitch. The credit trend is stable.
 The ratings reflect the company's conservative capital structure, improved cash flow, and low-risk, manageable construction expenditures. Credit quality measures should improve assuming constructive regulatory treatment of the company's March 1992 request for a $66 million or 5 percent rate increase and continued parent equity support.
 MEC is a wholly owned subsidiary of New England Electric System operating in Massachusetts and regulated by the Massachusetts Department of Public Utilities. The company purchases all of its power from affiliated New England Power Co., (NEP) which earns most of its revenues from wholesale power sales to affiliates. NEP plans for and funds new generating capacity for MEC and other retail affiliates. As a result, MEC's construction expenditures are limited to distribution and transmission facilities that support growth and ongoing system maintenance.
 Over the next five years, maintenance and improvement to the company's distribution and transmission system will result in construction expenditures averaging $80 million a year. The company expects to internally fund about 81 percent of these expenditures compared to 59 percent over the most recent five-year period.
 The company's capital structure has improved significantly as a result of a series of parent company equity infusions. Total debt as a percent of capitalization declined to 43.9 percent at the 12 months ended March 1992 from 50.6 percent in 1989. Pretax interest coverage excluding AFUDC was 2.88 times(x), a decline from 3.23x in 1990 reflecting higher operating expenses. Prospectively, the capital structure should remain conservative with total debt as a percent of capitalization stabilizing at 44 percent. Improvement in pretax interest coverage will depend upon the outcome of the current rate proceeding.
 -0- 6/15/92
 /CONTACT: Josephine Zeppieri of Fitch, 212-908-0575. CO: Massachusetts Electric Co. ST: Massachusetts IN: UTI SU: RTG


AH -- NY078 -- 0340 06/15/92 16:58 EDT
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Date:Jun 15, 1992
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