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WESTERN RESOURCES $350 MILLION SHELF DEBT RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --

 WESTERN RESOURCES $350 MILLION SHELF DEBT RATED 'A-' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, June 17 /PRNewswire/ -- Western Resources, Inc.'s (formerly Kansas Power and Light Co.) $350 million shelf offering of first mortgage bonds is rated "A-" by Fitch. Western Resources' rating reflects the March 31 consummation of a merger agreement with Kansas Gas & Electric Co. (KGE). KGE has become a wholly owned subsidiary of Western.
 On March 31, ratings were lowered on Western's senior debt to "A-" and commercial paper to "F-2" from "AA-" and "F-1+," respectively. Kansas Gas's senior debt was raised to "A-" from "BBB." Western's preferred and preference stock was lowered to "BBB+" from "AA-" and "A+," respectively.
 Western Resources' new rating reflects the large amount of additional debt incurred to finance the merger and the impact of acquiring a lower rated company, with nuclear operations and an off-balance sheet lease, at a sizeable premium to book value.
 Initial credit measures for the combined entity are weak relative to the rating category. At March 31, the combined debt ratio stood at about 60 percent, compared with 48 percent at year-end 1991. Adjustment for the sale/leaseback of the coal-fired La Cygne generating plant would add approximately 3 percent to the debt ratio. Pre-tax interest coverage would be 2.34 times(x) at year-end 1992 (1.90x adjusted for sale/leaseback financing), down from 2.69x at year-end 1991.
 The new entity will benefit from stronger cash flow and potentially sizeable cost savings that the company estimates will allow for recovery of the acquisition premium. In addition, management is committed to strengthening the balance sheet. The combined utility also possesses an excellent fuel mix, strong transmission system, efficient plant operations, and minimal acid rain exposure, all of which help offset the weakened financial profile.
 -0- 6/17/92
 /CONTACT: Ed King of Fitch, 212-908-0574/ CO: Western Resources, Inc. ST: Kansas IN: UTI SU: RTG


GK -- NY057 -- 1114 06/17/92 13:20 EDT
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Publication:PR Newswire
Date:Jun 17, 1992
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