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For Immediate Release


Pepco Sells $270 Million of First Mortgage Bonds


March 17, 1999

Potomac Electric Power Company today sold $270 million of 6 percent, five-year First Mortgage Bonds maturing April 1, 2004. The bonds will be offered to investors by a group led by Legg Mason Wood Walker, Incorporated at a price of 100 percent to yield 6 percent to maturity.

Pepco will pay interest on the bonds on the first day of each month, beginning May 1. Beginning July 1, 2000, Pepco may redeem some or all of the bonds before maturity at a redemption price equal to the principal amount redeemed plus accrued interest to the date of redemption.

The Company's First Mortgage Bonds are currently rated A1 by Moody's Investment Service, A by Standard & Poor's Corp., and A+ by Duff & Phelps Inc.

The proceeds of the sale will be used to finance, on a temporary basis, the Company's ongoing utility construction program and operations, and to pay:

    • $45 million of First Mortgage Bonds, 4.5 percent Series due 1999, which mature May 15;
    • Redeem at par $100 million of First Mortgage Bonds, 9 percent Series due 2000, which will be called for redemption April 28, 1999;
    • Redeem at 101 percent of principal amount $62.6 million of 7 percent Convertible Debentures due 2018, which will be called for redemption April 19, 1999.

 This material is not intended for use in connection with any sale or offer to sell or solicitation of an offer to buy any securities.

Point of Contact:
Ernie Bourschied

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