Pushed into action by the current concerns regarding credit ratings within the energy industry, Topeka-based Western Resources said Friday that it has closed on two offerings of securities for $765 million to refinance its debt.

“The closing of these offerings was an important step in the refinancing of approximately $1.5 billion of total indebtedness maturing prior to January 1, 2004,” said Paul R. Geist, CFO. “We believe these closings should remove any uncertainties about our ability to refinance this indebtedness.”

Western Resources completed an offering of $365 million of first mortgage bonds, 7-7/8% series due 2007 and an offering of $400 million of unsecured senior notes, 9-3/4% series due 2007. The company said the proceeds of the offerings were used to retire a term loan maturing March 17, 2003, with an outstanding principal balance of $547 million, to provide for the repayment at maturity of $100 million principal amount of first mortgage bonds due in August 2002 together with accrued interest, to reduce the outstanding balance of a revolving credit facility and to pay fees and expenses of the transactions.

Just in the past few weeks, companies such as Williams and Dynegy have had to address creditworthiness concerns from investors and rating agencies. During the first week of May, Moody’s Investor Services put the credit ratings of Williams and its affiliates under review for possible downgrade. Williams CEO Steve Malcolm, said that while he is “very disappointed” with the announcement, “we are still fully committed to maintaining our current level of investment-grade credit rating” (see related story).

Late last month, Western Resources subsidiary, Westar Industries Inc., said that it was “reviewing alternatives” for changing its 44.7% investment in Tulsa-based Oneok Inc. — one of the largest natural gas distribution companies in the nation with more than 1.4 million customers. The announcement came just days after the company reported a consolidated net loss of $652 million (-$9.14 per share) in the first quarter of 2002, compared to net earnings of $ 4.5 million ($0.06 per share) in the 2001 quarter. Western Resources said its earnings were brought lower by taking a one-time charge for severance and an impairment related to the adoption of new accounting standards.

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