Summary: East Midlands Electricity PLC

Standard & Poors, June 1998

Abstract
Higher financial leverage on East Midlands Electricity PLC's (East Midlands) future debt-servicing capacity followed its takeover by U.S. utility Dominion Resources (parent of Virginia Electric & Power Co.) in early 1997, which means that East Midlands' cash flow will be required to service significantly increased debt in DR Investments, East Midlands' intermediate holding company and the acquisition debt holding company. This results in a generally reduced margin of protection for debt service. Funds from operations interest coverage is expected to fall to around 2.5 times (x) from 5x preacquisition. Standard & Poor's does not expect that regulatory "ring-fencing" provisions in this case will preserve debt service capacity within the operating company against financial requirements at the holding company level at...

Companies mentioned in this report are: Western Power Distribution (East Midlands) PLC
Action: Review

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This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.

Western Power Distribution (East Midlands) PLC

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