Fitch rates Consolidated Edison notes BBB+

Fitch Ratings said it assigned a BBB+ rating to Consolidated Edison, Inc.'s (BBB+ issuer default rating) new $400 million issue of 2% senior unsecured debentures series 2017 A due March 15, 2020.

The outlook is stable.

The new debentures will rank equally with the company’s existing senior unsecured obligations.

Net proceeds will be used for general corporate purposes, including repayment of short-term debt bearing interest at variable rates, and to subsequently prepay at Consolidated Edison’s option the $400 million term loan, under a June 2016 credit agreement, with available cash and the proceeds from the issuance of additional short-term debt.

Fitch said Consolidated Edison’s credit profile is supported by the predictable cash flows of regulated utility subsidiaries Consolidated Edison Co. of New York, Inc. (BBB+ issuer default rating) and sister utility Orange & Rockland Utilities, Inc. (BBB+ issuer default rating) and the financial support it receives from them in the form of dividends for the payment of corporate expenses, dividends to common shareholders, and for other business matters.

The agency said it estimates the regulated utilities will contribute, on average, roughly 95% of consolidated EBITDA over 2017-2020 with the remainder provided by Consolidated Edison’s competitive energy businesses and the electric and gas transmission operations of its wholly owned subsidiary Con Edison Transmission, Inc.

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