S&P ups Tucson Electric

Standard & Poor's said it raised its unsecured debt ratings for Tucson Electric Power Co. by one notch to BB- and assigned its BB- rating to the proposed offering of up to $121 million of 2008 series A industrial development bonds issued by the Pima County Industrial Development Authority in Arizona.

The agency said that the Pima bonds will be unsecured obligations of Tucson Electric, which is the obligor, adding that Tucson Electric will use the offering's proceeds to pay down its revolver balances of about $75 million as of March 7 and to prefinance a portion of Tucson Electric's $138 million maturity of collateral trust obligations due August 2008.

The outlook is stable.

S&P added that the upgrade reflects improvement in Tucson Electric's ratio of priority debt to assets.

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