THE BELL TELEPHONE COMPANY OF PENNSYLVANIA $225 MILLION 7-3/8 PERCENT DEBENTURES DUE 2033 RATED 'AA+'
CHICAGO, March 3 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a AA+' (Double-A-Plus) rating to The Bell Telephone Company of Pennsylvania's (BTPA) $225 million issue of 7-3/8 percent debentures due March 15, 2033. The debentures are non-callable for ten years and were priced at 99.047 to yield 7.45 percent to maturity. Proceeds will be used to refinance higher cost debt. The Duff & Phelps rating reflects an expectation that Bell Telephone of Pennsylvania will sustain strong pre-tax interest coverage, fund construction spending principally from internal sources, and maintain debt as a percent of capital in the 45-47 percent range. BTPA's debt ratio appears high relative to other local telecommunications companies principally because BTPA elected to adopt new accounting rules for post- retirement benefits (SFAS 106) at the beginning of 1991. The debt ratio rose nearly five percentage points reflecting the decline in equity as the SFAS 106 liability was recorded. BTPA's operating earnings declined in 1992 due to higher depreciation charges as a result of a decrease in depreciable plant lives ordered by Pennsylvania regulators effective January 1992. Duff & Phelps Credit Rating Co. expects coverages to gradually improve in subsequent years due to growing sales of advanced network features and continued cost containment. The Bell Telephone Company of Pennsylvania provides local telecommunications services and access to the networks of long distance companies to over 5.3 million lines in Pennsylvania. The only city with a population above 50,000 not served by the company is Erie. BTPA is a wholly owned subsidiary of Bell Atlantic Corporation. -0- 3/3/93 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125/
CO: Bell Telephone Company of Pennsylvania ST: Pennsylvania IN: TLS SU: RTG
PS -- NY044 -- 2435 03/03/93 11:59 EST
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|Date:||Mar 3, 1993|
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