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TU ELECTRIC $400 MILLION SHELF DEBT RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --

 TU ELECTRIC $400 MILLION SHELF DEBT RATED 'BBB' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Jan. 31 /PRNewswire/ -- Texas Utilities Electric Co.'s shelf registration of $400 million first mortgage and collateral trust bonds is rated "BBB" by Fitch. The company's outstanding $6.7 billion "BBB" first mortgage bonds, collateralized pollution control revenue bonds, and secured medium term notes are affirmed, as are its $259 million "BBB-" Connecticut National Bank secured facility bonds and $1.4 billion "BBB-" preferred stock. The credit trend is stable. TU Electric is a wholly owned subsidiary of Texas Utilities Co.
 Last August's regulatory proceeding addressed the rate treatment of the 1,150 MW Comanche Peak 1 nuclear unit granting an increase of $442 million annually. This was a key factor in raising the level of internal cash flow for the twelve months ended Sept. 30, 1991 to 24 percent from a negative position a year earlier. Credit quality, however, will remain under pressure until Comanche Peak Unit 2 is completed in 1993 and a second rate increase is granted to include this unit in rate base.
 Rating maintenance reflect expectations that the Public Utility Commission of Texas will grant sufficient rate relief to support existing ratings. Bonds issued from this $400 million shelf filing will be used for refunding outstanding fixed rate securities. In September 1991, a $1.38 billion pre-tax writeoff ($1.011 billion after-tax) was taken due to the last rate case's Comanche Peak disallowance. As a result, TUEC cannot meet the earnings tests for certain new issuances contained in its bond indentures and preferred stock charter.
 Pretax interest coverage, at 2.27 times (x) for the twelve months ended Sept. 31, will remain weak. The company's capital structure is conservative for the rating category, however, with total debt, preferred stock, and common equity at 51.96 percent, 9.75 percent, and 38.29 percent respectively of capitalization for this period. A commitment by TU Elei?c's parent to maintain the present comparatively strong common equity ratio throughout this period provides continuing financial support and flexibility.
 -0- 1/31/92
 /CONTACT: Anne F. Faber of Fitch, 212-908-0566/
 (TXU) CO: Texas Utilities Electric Co. ST: Texas IN: UTI SU: RTG


TS -- NY036 -- 5606 01/31/92 12:28 EST
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Date:Jan 31, 1992
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