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PROPOSED IPALCO/PSI MERGER HAS NO CREDIT IMPACT, FITCH SAYS -- FITCH FINANCIAL WIRE --

 NEW YORK, March 18 /PRNewswire/ -- IPALCO Enterprises, Inc.'s planned acquisition of PSI Resources, Inc., is characteristic of the continuing consolidation in the industry but has no immediate credit implications, Fitch says.
 IPALCO, the parent of Indianapolis Power & Light Co. (IPL) earlier this week launched a surprise tender offer for all the common stock of PSI Resources, the parent of PSI Energy, Inc. The cash and stock transaction ($26.50 per share) has an indicated value of about $1.5 billion. The cash portion of the transaction, approximately $300 million, will initially be financed with an unsecured bank term loan at the holding company level that will be non-recourse to the utility. IPL's first mortgage bonds and preferred stock are rated 'AA'. PSI Energy's 'BBB+' first mortgage bonds, secured pollution control bonds and secured medium-term notes, 'BBB' unsecured pollution control notes and preferred stock, and 'F-2' commercial paper remain on FitchAlert, where they were placed on Dec. 17, 1992 due to its agreement to merge with Cincinnati Gas & Electric Co.
 Fitch expects electric industry consolidation to continue due to increasing competition and the importance of lowering costs. However, it marks only the third hostile tender offer for a major electric utility. The previous two were unsuccessful.
 The combination appears to be a good long-term fit because the two utilities are interconnected, operate in contiguous service territories within the same state and are low cost producers. IPALCO is pursuing the acquisition to capture surplus capacity to meet the growing power needs of its own customers. IPL has a reserve margin of approximately 9 percent, compared to 24 percent for PSI Energy.
 The credit impact will depend on the ultimate price IPALCO pays for PSI Resources, the eventual cost savings, regulatory treatment of the acquisition premium, and the operational and financial composition of the resulting entity. Also, Fitch will examine the potential synergies of combining the operations. The acquisition requires a number of regulatory approvals.
 -0- 3/18/93
 /CONTACT: Edward King, 212-908-0574, of Fitch/
 (IPL)


CO: IPALCO Enterprises, Inc.; PSI Resources, Inc. ST: Indiana IN: UTI SU:

LR -- NY053 -- 7544 03/18/93 13:28 EST
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Date:Mar 18, 1993
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