MMWEC POWER SUPPLY REVENUE BONDS RATED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --
MMWEC POWER SUPPLY REVENUE BONDS RATED 'BBB+' BY FITCH
-- FITCH FINANCIAL WIRE --
NEW YORK, July 31 /PRNewswire/ -- Massachusetts Municipal Wholesale Electric Co.'s (MMWEC) $256,955,000 Power Supply System Revenue Bonds 1992 Series D, E, and F are rated 'BBB+' by Fitch. The 'BBB+' rating on approximately $1.4 billion outstanding Power Supply System Revenue Bonds is affirmed. The credit trend is stable. The bonds are scheduled to sell through negotiation the week of August 3 by a Goldman, Sachs & Co. syndicate.
Since the beginning of the year, the Massachusetts Municipal Wholesale Electric Co. (MMWEC) has refunded over $700 million of high coupon bonds. The refundings have provided substantial debt service savings for the project participants, which will enable those participants to reduce electric rates to their customers, thereby eliminating much of the rate disparity with other regional utilities. In general, credit characteristics of the participants' electric systems are fundamentally sound. Other positive factors include a diversity of generating resources and a balanced fuel supply.
Strong bondholder protection is provided by the ability to use surplus cash flow from designated accounts in all of MMWEC's projects, in addition to the 25% step-up permitted within each project. Sensitivity analyses show surplus cash is sufficient to cover the current shortfall resulting from defaults of certain Project No. 6 out- of-state participants and other defaults, should they occur.
Credit risks focus on the still weak, though improved, New England economy and a high concentration of financial assets in a single plant, the Seabrook Nuclear Generating Station. While attempts by certain Massachusetts participants to void their contractual agreements with MMWEC have not proven successful, certain litigation remains ongoing.
/CONTACT: Alan Spen, 212-908-0594, or Susan M. Courtney, 212-908-0503, both of Fitch/ CO: Massachusetts Municipal Wholesale Electric Co. ST: Massachusetts IN: UTI SU: RTG
PS -- NY065 -- 5760 07/31/92 16:30 EDT