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TRANSCONTINENTAL GAS 'BB' DEBT AFFIRMED, CREDIT TREND IMPROVING

 TRANSCONTINENTAL GAS 'BB' DEBT AFFIRMED, CREDIT TREND IMPROVING
 NEW YORK, Aug. 12 /PRNewswire/ -- Transcontinental Gas Pipe Line Corp.'s (TGPL) $545 million 'BB' debentures and notes and $106 million 'B+' preferred stock are affirmed by Fitch. The credit trend is changed to improving from uncertain. TGPL is one of two natural gas pipeline subsidiaries of Transco Energy Co.
 The affirmation and change to an improving trend reflect significant progress to date in implementing the company's strategic restructuring plan designed to reduce debt, improve financial flexibility, and restore earnings. As a result of these efforts, near-term liquidity concerns have eased. Improved operating performance from Transco's pipeline segment and the expected sale of at least $100 million of common stock later this year will further contribute to long-term recovery.
 Asset sales and meaningful spending reductions have exceeded the aggressive targets first outlined by management in October 1991. In June, the application of $300 million of Transco note proceeds to reduce bank debt ensured adequate working capital for near-term cash needs. Currently, there is about $200 million of short-term debt outstanding under Transco's three-year $450 million working capital line, giving it a substantial spending cushion. Short-term debt levels are expected to drop materially by year end.
 Long-term recovery is supported by the operating strengths and predictable cash generated by Transco's pipeline subsidiaries and the continued restructuring of non-profitable businesses. Coal mining properties are expected to be sold in late 1993 or 1994 with the proceeds applied to reduce debt and, while poor performing coal bed methane operations have shown recent improvement, more needs to be done to turn a profit. Even if Transco continues to meet its strategic goals, consolidated balance sheet strengthening at Transco will be gradual, with common equity expected to increase to 17 percent of capitalization at year-end 1992 from 13.4 percent a year earlier. Credit fundamentals are stronger at TGPL as debt leverage should end 1992 at under 60 percent of capitalization.
 -0- 8/12/92
 /CONTACT: Ralph Pellecchia of Fitch, 212-908-0586/
 (E) CO: Transcontinental Gas Pipe Line Corp. ST: Texas IN: OIL SU: RTG


SB -- NY070 -- 6282 08/12/92 15:06 EDT
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Publication:PR Newswire
Date:Aug 12, 1992
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