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TEXAS-NEW MEXICO POWER COMPANY $100 MILLION FIRST MORTGAGE BONDS RATED 'BB,' $140 MILLION SECURED DEBENTURES RATED 'B+' BY DUFF & PHELPS

 CHICAGO, Sept. 16 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned ratings of "BB" (Double-B) and "B+" (Single-B-Plus) to Texas-New Mexico Power Company's proposed offering of $100 million first mortgage bonds, Series U, due 2000, and $140 million secured debentures, due 2003. The debentures will be secured by a pledge of the 1993 Unit 1 replacement note. That note will be ratably secured by the Unit 1 first lien mortgage on the assets of Texas Generating Company, a wholly owned subsidiary of Texas-New Mexico Power, and the existing second mortgage liens on Texas-New Mexico Power's bond indenture trust estate assets in Texas. Proceeds primarily will be used to prepay a portion of bank loans related to construction of the TNP One generating plant.
 Texas-New Mexico Power is executing another step of its long-term program to refinance construction loans for the TNP One generating plant. The remaining portion of this bank debt, as currently being restructured, is subject to a maturity schedule that should accommodate refinancing efforts. The leveraged capital structure should show modest improvement over time as the company pays down debt and receives additional equity contributions from parent, TNP Enterprises, Inc. A return to more normal weather and stronger customer growth in some parts of its territory will increase 1993 revenues and earnings. Credit protection measures should strengthen as earnings recover. Cash generation is strong. Improvement in credit fundamentals will be somewhat slowed by the recent Texas Court of Appeals decision effectively upholding a portion of the Texas Public Utility Commission's earlier disallowance of Unit 1 costs. Texas-New Mexico Power is likely to appeal this ruling. The status of certain other disallowances related to Unit 1 and 2 costs remains uncertain.
 The company is expected to maintain its competitive position with respect to large customer rates. Modest amounts of rate relief will be necessary in the next few years to sustain a gradual recovery in credit protection measures.
 TNP One, a two-unit, 300 mw coal plant, was constructed to reduce the company's dependence on purchased power. The plant is operating well with a capacity factor in excess of 90 percent. The units provide about 40 percent of the company's total energy needs.
 Texas-New Mexico Power, the major subsidiary of TNP Enterprises, Inc., provides electric service to more than 200,000 customers in Texas and New Mexico.
 -0- 9/16/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/
 (TNP)


CO: Texas-New Mexico Power Company ST: Texas, New Mexico IN: UTI SU: RTG

TW -- NY055 -- 2720 09/16/93 13:36 EDT
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Publication:PR Newswire
Date:Sep 16, 1993
Words:425
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