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MIDWEST POWER SYSTEMS $425 MILLION MORTGAGE BONDS RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Jan. 21 /PRNewswire/ -- Midwest Power Systems Inc.'s new issue of $425 million mortgage bonds are rated A' by Fitch. The new issue consists of $75 million 6.25 percent mortgage bonds due Feb. 1, 1998, $75 million 6.75 percent mortgage bonds due Feb. 1, 2000, $100 million 7.125 percent mortgage bonds due Feb. 1, 2003, $75 million 7.375 percent mortgage bonds due Feb. 1, 2008, and $100 million 8.125 percent mortgage bonds due Feb. 1, 2023. The issues are takedowns from a previously issued shelf registration.
 The ratings reflect aggressive leverage, including short-term debt and a $142 million long-term nuclear power purchase contract, as well as Midwest Power's favorable service territory, expected merger savings, a positive regulatory climate, and conservative management. Although the capital structure and pretax interest coverage are weak for the A' category, the rating anticipates earnings stability from 1993 to 1995 with internal cash generation approximating 80 percent of total funds required for construction and demand side management (DSM) programs.
 Although the new series of mortgage bonds are junior to the existing first mortgage bonds, the A' rating reflects Midwest's covenant that no additional first mortgage debt will be issued while new junior bonds are outstanding. Additionally, Midwest is expected to continue to issue significant amounts of the mortgage debt in 1993 and will use a substantial portion of the proceeds to retire the outstanding first mortgage bonds.
 Prospectively, the capital structure with 55 percent debt will remain highly leveraged for the A' category. Pretax interest coverage is expected to recover from 1992's depressed level, caused by adverse weather, and should range between 2.8 times(x) and 2.9x. This assumes Midwest Power will systematically and successfully achieve new ratemaking necessary to cover increased costs, including nuclear operations and DSM programs.
 Midwest Power was formed in July 1992 by the merger of Iowa Power Inc. and Iowa Public Service Co.
 -0- 1/21/93
 /CONTACT: John N. Watt of Fitch, 212-908-0523/


CO: Midwest Power Systems Inc. ST: Iowa IN: UTI SU: RTG

CK -- NY030 -- 7336 01/21/93 11:00 EST
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Date:Jan 21, 1993
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