Baltimore Gas and Electric Co. said yesterday that it will redeem $33 million worth of mortgage bonds next month.
The move is the latest of a series of financial maneuvers by the Baltimore-area utility in the past year. Company spokesman Arthur J. Slusark said BG&E; hasn't decided whether to take advantage of lower interest rates to replace the bonds with less expensive debt or just keep the long-term debt off its books.
BG&E;'s assistant treasurer, Thomas E. Ruszin, said that about a thousand investors are believed to hold the affected bonds. He said investors will not be able to trade the bonds after Sept. 28; after that date, they can only be turned over to BG&E; for repayment.
The bonds are not due until 1999 and 2000, Mr. Slusark said. One of the bond issues being redeemed carries an interest rate of 8.25 percent and the other pays 8.625 percent.
Mr. Ruszin said BG&E; has about $1.6 billion of mortgage bonds, which are backed by the company's real estate assets. He said the utility's most expensive mortgage debt pays a 9.375 percent yield. Some of those bonds may be refinanced, but some would carry redemption prices so high it remains more cost-effective to continue paying yields higher than today's market rates.
"We'll monitor it and do whatever we can to lower interest costs," Mr. Ruszin said.