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NORTHERN ILLINOIS GAS $50 MILLION FIRST MORTGAGE BONDS RATED 'AA+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, March 23 /PRNewswire/ -- Northern Illinois Gas Co.'s (NI- Gas) shelf registration takedown of $50 million three-year first mortgage bonds is rated 'AA+' by Fitch. Outstanding first mortgage bonds are affirmed at 'AA+'. The credit trend is stable.
 These ratings for NI-Gas stem from a stable and broadly diversified natural gas customer base in the utility operations, a conservative balance sheet, high quality of earnings, and predictable cash flows and coverages.
 In spite of mild heating-season weather during 1990-91 and an ongoing sluggish pace in economic activity, NI-Gas' operating and financial fundamentals held up exceptionally well during the last three years. Indicators measuring the company's credit quality are expected to remain quite strong. Pretax interest coverage declined from an exceptional 5-times(x) level during the mid- and late-1980s to better than 4x recently. During 1993 and beyond pretax coverage should comfortably exceed 4x. Internal cash generation of capital expenditure requirements rose from approximately 75 percent in 1988 to a plateau of 83 percent-85 percent in recent years. Prospective figures are likely to approximate or exceed 100 percent.
 Long-term debt to capital has consistently remained in the 33 percent-to-38 percent range since the mid-1980s; numbers in the range of 38 percent-to-42 percent are probable during the next several years. Total debt, including intra-year seasonal borrowings, regularly peaks at around 50 percent of overall year-end capitalization; temporary heating- season borrowings are paid off completely each spring. This conservative pattern is expected to recur in future years, given seasonal borrowing needs and manageable capital spending programs.
 -0- 3/23/93
 /CONTACT: William Stellenwerf CPA of Fitch, 212-908-0558/


CO: Northern Illinois Gas Co. ST: Illinois IN: UTI SU: RTG

PS -- NY043 -- 8646 03/23/93 11:46 EST
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Publication:PR Newswire
Date:Mar 23, 1993
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