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NEW ENGLAND POWER SENIOR DEBT RAISED TO 'AA-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW ENGLAND POWER SENIOR DEBT RAISED TO 'AA-' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, June 15 /PRNewswire/ -- New England Power Co.'s $207 million first mortgage bonds and $540 million general and refunding mortgage bonds are raised to 'AA-' from 'A+' by Fitch. The company's $86 million preferred stock is raised to 'AA-' from 'A'. The credit trend is stable.
 The higher ratings reflect improvement in credit quality as a result of rate increases in 1990 and 1991. Credit quality is also supported by the company's conservative capital structure, adequate baseload generating capacity and federal regulation which relies on the settlement process to expedite rate proceedings. The company, generating and transmission subsidiary of the New England Electric System, (NEES), earns nearly all its revenues from wholesale power sales to three retail affiliates and is regulated by the Federal Energy Regulatory Commission (FERC).
 Revenues have increased by more than $100 million as a result of the rate recognition of purchase power contracts during the final quarters of 1990 and 1991 and a first quarter 1991 rate increase. As a result, pretax coverage of interest excluding AFUDC increased to 3.81 times(x) at the twelve months ended March 1992 from 3.19x at year-end 1990. Total debt as a percent of capitalization was 45.1 percent at the 12 months ended March 31, 1992.
 Strong internal cash generation should enable NEP to sustain its improved credit quality measures during the next five years despite rising construction requirements. Internal generation of construction expenditures is expected to exceed 90 percent over the next three years, a period when NEP will be adding capacity, compared to an average of 140 percent over the most recent five-year period. Total debt is expected to range between 45 percent-47 percent and interest coverage should exceed 3.5x.
 NEP is repowering the 136 megawatt (mw) Manchester Street Station, which will be retrofitted with three combustion turbines increasing capacity to 490 mw. The total cost, including improvement to the local transmission system, is $600 million-$650 million. NEP's share of this cost is $475 million-$520 million. The project should be complete by 1996.
 -0- 6/15/92
 /CONTACT: Josephine Zeppieri of Fitch, 212-908-0575/
 (NES) CO: New England Power Co. ST: Massachusetts IN: UTI SU: RTG


AH -- NY084 -- 0370 06/15/92 17:28 EDT
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Publication:PR Newswire
Date:Jun 15, 1992
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