Printer Friendly

MDU RESOURCES GROUP SENIOR DEBT, PREFERRED RAISED TO 'A' BY FITCH -- FITCH FINANCIAL WIRE --

MDU RESOURCES GROUP SENIOR DEBT, PREFERRED RAISED TO 'A' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, April 7 /PRNewswire/ -- MDU Resources Group, Inc.'s (MDU) $170 million outstanding first mortgage bonds and $17.4 million preferred stock are raised to 'A' from 'A-' by Fitch. The company's 'F-1' commercial paper is affirmed. The credit trend is stable. MDU's proposed $150 million secured medium-term notes filed under a shelf registration are also rated 'A'.
 The rating is supported by continued solid earnings contributions by the electric and gas distribution operations and non-regulated coal and oil subsidiaries, as well as the resolution of the last take-or-pay contract at MDU's wholly owned pipeline subsidiary, Williston Basin Interstate Pipeline Co. While pipeline earnings will continue to be impacted by a gas repurchase agreement and its inability to sell the stored gas, consolidated earnings should continue to improve. Electric and gas distribution operations accounted for 44 percent of 1991 consolidated earnings, coal operations 23 percent, and oil operations 19 percent. The remaining 14 percent of earnings was from the pipeline unit.
 Improved consolidated earnings, combined with benefits from debt and preferred stock refinancing, should enable consolidated pre-tax coverage to improve to about 3.0 times(x) over the next few years (including the carrying cost of a $99 million gas repurchase agreement) from 2.5x currently.
 Strong liquidity also provides credit support. At Dec. 31, MDU had approximately $54 million of cash on hand. This cash, and the elimination of potential take-or-pay write-off exposure, should enable MDU to reduce debt leverage, including the gas repurchase agreement, below the current 51 percent as excess funds are used to repay outstanding debt. The company also had liquid investments of $68 million at year-end 1991.
 While spending on the non-regulated oil and gas exploration and producing unit is expected to reach a sizable $29 million a year through 1995, utility spending will be flat and overall capital spending is expected to be manageable. Cash flow should fund most construction expenditures, thus limiting MDU's need for new debt.
 Williston Basin's earnings will continue to be impacted by the carrying cost associated with the gas repurchase agreement. Storage of the relatively high cost gas has been financed with commercial paper borrowings. However, its outlook has brightened due to improved gas transportation sales and stringent cost control measures. Most remaining uncertainties associated with long-pending legal and regulatory issues at the pipeline unit were resolved last year, including the last major take-or-pay contract dispute. In October 1991, a Federal District Judge in North Dakota rendered a decision awarding Koch Hydrocarbon Co. a judgment totaling $32 million plus potential future purchase obligations on one of the defaulted contracts. Prior to trial, scenarios were presented alleging contract damage claims ranging from $104 million to $395 million, without interest. Koch has appealed the decision and MDU has cross-appealed.
 -0- 4/7/92
 /CONTACT: Ed King of Fitch, 212-908-0574/
 (MDU) CO: MDU Resources Group Inc. ST: North Dakota IN: UTI SU: RTG


AH -- NY053 -- 5932 04/07/92 15:57 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 7, 1992
Words:505
Previous Article:SYNOVUS FINANCIAL CORP. AND FIRST COMMERCIAL BANCSHARES, INC. ANNOUNCE AGREEMENT TO MERGE
Next Article:LIFE TECHNOLOGIES ELECTS TWO NEW DIRECTORS; DAVID L. COFFIN RETIRES; WORTH LOOMIS NAMED CHAIRMAN


Related Articles
RJR NABISCO $5.2 BILLION SENIOR DEBT UPGRADED TO 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --
RJR NABISCO $1.2 BILLION NEW SENIOR DEBT RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --
CHEMICAL BANKING $1.1 BILLION SHELF DEBT, PREFERRED RATED BY FITCH FITCH FINANCIAL WIRE
MDU RESOURCES GROUP $105 MILLION SECURED NOTES RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --
VIRGINIA ELECTRIC $370 MILLION SENIOR DEBT RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --
WESTERN RESOURCES $350 MILLION SHELF DEBT RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --
Westinghouse Electric $350 Million Senior Unsecured Notes Rated 'A' By Fitch -- FITCH FINANCIAL WIRE --
PRIMERICA SENIOR DEBT RAISED TO 'A+', $300 MILLION PREFERRED 'A' BY FITCH -- FITCH FINANCIAL WIRE --
Fitch Changes Ratings On $18 Billion Of Preferred Stock -- Fitch Financial Wire --
MDU Resources $30 Million Medium-Term Note Shelf Takedown Rated 'A' By Fitch - Fitch Financial Wire -

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters