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SEATTLE CITY LIGHT: BOND MARKETS SIGNAL CONFIDENCE IN CITY LIGHT; $179-MILLION BOND SALE APPROVED TODAY

SEATTLE CITY LIGHT: BOND MARKETS SIGNAL CONFIDENCE IN CITY LIGHT;
 $179-MILLION BOND SALE APPROVED TODAY
 SEATTLE, Aug. 14 /PRNewswire/ -- Decisive action to cut costs and increase revenues helped persuade the financial community to reaffirm its confidence in Seattle City Light, Acting Superintendent Roberta Palm Bradley reported today.
 Two national bond rating agencies -- Standard & Poor's and Moody's -- reaffirmed the utility's AA/Aa bond rating this week, after completing independent reviews of City Light's financial performance. The rating action follows strong steps by the Mayor and City Council to neutralize the financial effects of a regional drought.
 Like other Northwest electric utilities, Seattle City Light has faced some of the most adverse conditions for hydropower production in its history, leading to a major City Light revenue shortfall in 1992. On July 9, after directing the utility to cut or defer $13.1 million, Mayor Norm Rice proposed a short-term drought surcharge to recoup drought-related losses. On July 31, the Seattle City Council approved a 10-percent rate increase from September 1992 through April 1993, with a 5-percent increase for low-income customers. The temporary increase will raise $10.2 million in 1992.
 In their reviews, Standard & Poor's and Moody's both noted that Seattle's adoption of a drought-related interim rate increase was an important factor in their decision to uphold City Light's positive
AA bond rating. A second sign of bond-market confidence occurred on


Wednesday, Aug. 12, when the City received $179 million in bond purchase proposals from an underwriting group consisting of Smith Barney, Merrill Lynch, Goldman Sachs, Grigsby Brandford and Smith Mitchell. The long- planned 1992 bond sale, approved by the City Council this morning, "brought interest rates consistent with a solid bond rating," according to John Saven, deputy superintendent for Corporate Services. City Light's borrowing costs for the issue will be under 6 percent.
 City Light sold $76 million of the bonds to refund outstanding, higher-interest bonds sold in the 1980s. The refunding will save about $3.8 million in interest costs.
 The remaining $103 million will finance part of City Light's 1992-1997 capital projects, including a regionally hailed energy conservation program, a new hydroelectric plant on the Tolt River and environmental enhancements on the Skagit River.
 "We're not in calm waters yet," Acting Superintendent Bradley noted. "But I think we've shown the financial community that our utility and our elected officials can pull together and make the tough decisions."
 -0- 8/14/92
 /CONTACT: Scott Forslund of Seattle City Light, 206-386-4233/ CO: Seattle City Light ST: Washington IN: UTI SU: RTG


SC-JH -- SE001 -- 0258 08/14/92 17:56 EDT
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Publication:PR Newswire
Date:Aug 14, 1992
Words:429
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