S&P trims Caribbean Utilities

S&P said it downgraded Caribbean Utilities Co. Ltd.'s issuer credit and senior unsecured debt ratings to BBB+ from A-.

The outlook is stable.

“The downgrade reflects our ongoing holistic view that climate change will likely increase the frequency and severity of hurricanes, and that CUC is relatively more exposed than peers to this risk given its small size and geographic isolation, supporting the use of our negative CRA modifier,” S&P said in a news release.

“In addition, since we view CUC as a moderately strategic subsidiary of Fortis Inc., in our opinion, CUC is less integral to Fortis compared to Fortis' other subsidiaries. As such, CUC's ratings do not benefit from any ratings uplift despite Fortis being rated higher that CUC. Overall, these factors led to our decision to downgrade CUC.”

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