BRYN MAWR, Pa., May 7, 2002 -- Philadelphia Suburban Corp. announced today that Standard and Poor's (S&P) affirmed its ratings outlook on PSC's largest subsidiary--Pennsylvania Suburban Water Co. (PSW)--following PSC's announcement that it had reached a definitive merger agreement with Pennichuck Corp. which was approved by both companies' boards.
The S&P report said, "Although PSC is unrated, Standard & Poor's considers the overall credit quality of the holding company when determining the ratings of PSW."
PSC Chairman Nicholas DeBenedictis said, "Although the affirmation of the rating is specific to Pennsylvania Suburban Water Company, we are encouraged by S&P's acknowledgment that `...the substantial equity used to fund the acquisition will not adversely affect the financial profile of PSC, the acquisition will provide a measure of geographic and regulatory diversity, and while Pennichuck is not rated, an analysis of its financial profile indicates that the utility's credit quality is at or above the average.'"
The report also said, "The stable outlook reflects PSW's competitive position, Standard & Poor's expectations of continued regulatory support, adequate rate relief to recover capital investments, and good growth prospects supported by additional, disciplined acquisitions."
Effective January 1, 2002, S&P assigned a corporate credit rating and first mortgage bonds credit rating to PSC's then newly-formed largest subsidiary, Pennsylvania Suburban Water Company. S&P assigned its A+ corporate credit rating and AA- senior secured debt rating to the company's first mortgage bonds and described the company's outlook as "stable."
S&P referenced the company's above average service territory, supportive regulatory environment, ample and quality water supplies, efficient operations and disciplined management team that focuses on growth through acquisitions.
PSC is the nation's second largest investor-owned water utility serving nearly two million residents in Pennsylvania, Ohio, Illinois, New Jersey, Maine and North Carolina.
