- Email: [email protected]
The best and worst of times
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The Best and Worst of Times
r o m time to time we note the b o n d rating firms' appraisals of the credit-worthiness of electric utility debt, as well as "buy-side" analysts views of utility debt and equit . Gloom and d o o m assessments emanating from the major rating firms last year - - most conspicuously in Standard & Poor's revision of rating outlooks for fully one-third of electric utilities from "stable" to "negative" - seemed to signal that further sliding was inevitable. Last fall's Edison Electric Institute's Financial Conference, amid the fantasia of Walt Disney World (which operates its o w n utility; symbolizing
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• D u f f & Phelps Credit Rating Co. raised Illinois Power Co.'s debt ratings, noting that the com-
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Place
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pany has refunded and retired a significant a m o u n t of debt and preferred stock has manageable construction requirements, and a strong cash flow. IPC's first mortgage bonds, n e w mortgage and collateralized pollution control revenue bonds were reaffirmed at BBB (Triple-B). The c o m p a n y will see capital d e m a n d s in Phase II of the Clean Air Act acid rain program, however. Duff & Phelps also raised Illinois Power's preferred stock rating from BB+ (Double-B-Plus) to BBB- (Triple-B-Minus). D&P noted, "The company's average rates and costs are high relative to the surrounding region. However, the c o m p a n y has long had experience in retaining customers through contract negotiations and has been largely successful to date."
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the growing competition) saw so m u c h hand-wringing from analysts of every stripe that EEI's Tom K u h n invoked no less a personage than Mickey Mouse to cheer up the crowd and p u t it all into perspective (TEJ, Dec. '93/Jan. '94 at 7). In that spirit, we have noted the following assortment of actions by rating agencies and other analysts. Interestingly although nothing outwardly has changed to boost the comfort level of debt and equity holders - - indeed, interest rates' sharp northward turn has worsened the picture - - there is no widespread loss of blood. The following recent actions by analysts were selected randomly, not to support any thesis of our
Competition or No, Many Utilities Are Keeping Their Bond Ratings and Investors
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Sponsor
E
S
T
.:o
Contact
NARUC's 5th Annual Nail Conf. on IntegratedResource Planning
May 15-18
Kalispell,MT
NationalAssociationof Regulatory UtilityCommissioners
(202) 898-2200
Demand-SideManagement: Principlesand Applications
May 16-20
Philadelphia, PA
Demand-SideManagement TrainingInstitute
(610) 667-3350
ElectricityTransmission& the Changing Structure of the ElectricityIndustry
May 18-19
Oakland, CA
Program on Workable Energy Regulation
(916) 752-5570
Conference and Expo
May 18-20
Boston, MA
Edison ElectricInstitute
(202) 508-5563
Electric Pricingand Market Policies
June 8-9
Washington, D.C.
ExecutiveEnterprises
(800) 831-8333
Alternative Rate Designfor the Electric Power Industry
June 20
San Francisco,CA
INFOCAST
(818) 609-9145
Solar 94 Conference: Golden Opportunitiesfor Solar Prosperity
June 25-30
San Jose, CA
American Solar EnergySociety
(303) 443-3130
NARUC Summer Committee Meetings
Jul. 24-28
San Diego, CA
NARUC
(202) 898-2206
1994 Annual Marketing
May 1994
7
H
E
N
The Best and Worst of Times
r o m time to time we note the b o n d rating firms' appraisals of the credit-worthiness of electric utility debt, as well as "buy-side" analysts views of utility debt and equit . Gloom and d o o m assessments emanating from the major rating firms last year - - most conspicuously in Standard & Poor's revision of rating outlooks for fully one-third of electric utilities from "stable" to "negative" - seemed to signal that further sliding was inevitable. Last fall's Edison Electric Institute's Financial Conference, amid the fantasia of Walt Disney World (which operates its o w n utility; symbolizing
F
M
E
E
S
I
N
F
O
• D u f f & Phelps Credit Rating Co. raised Illinois Power Co.'s debt ratings, noting that the com-
G
Date
S
0
F
Place
IN
C
U
S
pany has refunded and retired a significant a m o u n t of debt and preferred stock has manageable construction requirements, and a strong cash flow. IPC's first mortgage bonds, n e w mortgage and collateralized pollution control revenue bonds were reaffirmed at BBB (Triple-B). The c o m p a n y will see capital d e m a n d s in Phase II of the Clean Air Act acid rain program, however. Duff & Phelps also raised Illinois Power's preferred stock rating from BB+ (Double-B-Plus) to BBB- (Triple-B-Minus). D&P noted, "The company's average rates and costs are high relative to the surrounding region. However, the c o m p a n y has long had experience in retaining customers through contract negotiations and has been largely successful to date."
own.
T I N
Conference
W
the growing competition) saw so m u c h hand-wringing from analysts of every stripe that EEI's Tom K u h n invoked no less a personage than Mickey Mouse to cheer up the crowd and p u t it all into perspective (TEJ, Dec. '93/Jan. '94 at 7). In that spirit, we have noted the following assortment of actions by rating agencies and other analysts. Interestingly although nothing outwardly has changed to boost the comfort level of debt and equity holders - - indeed, interest rates' sharp northward turn has worsened the picture - - there is no widespread loss of blood. The following recent actions by analysts were selected randomly, not to support any thesis of our
Competition or No, Many Utilities Are Keeping Their Bond Ratings and Investors
.:.
E
T
E
R
Sponsor
E
S
T
.:o
Contact
NARUC's 5th Annual Nail Conf. on IntegratedResource Planning
May 15-18
Kalispell,MT
NationalAssociationof Regulatory UtilityCommissioners
(202) 898-2200
Demand-SideManagement: Principlesand Applications
May 16-20
Philadelphia, PA
Demand-SideManagement TrainingInstitute
(610) 667-3350
ElectricityTransmission& the Changing Structure of the ElectricityIndustry
May 18-19
Oakland, CA
Program on Workable Energy Regulation
(916) 752-5570
Conference and Expo
May 18-20
Boston, MA
Edison ElectricInstitute
(202) 508-5563
Electric Pricingand Market Policies
June 8-9
Washington, D.C.
ExecutiveEnterprises
(800) 831-8333
Alternative Rate Designfor the Electric Power Industry
June 20
San Francisco,CA
INFOCAST
(818) 609-9145
Solar 94 Conference: Golden Opportunitiesfor Solar Prosperity
June 25-30
San Jose, CA
American Solar EnergySociety
(303) 443-3130
NARUC Summer Committee Meetings
Jul. 24-28
San Diego, CA
NARUC
(202) 898-2206
1994 Annual Marketing
May 1994
7