Moody's lowers CenterPoint view to negative

Moody's Investors Service said it affirmed the ratings of CenterPoint Energy Houston Electric, LLC, including its A3 senior unsecured and issuer rating and A1 senior secured rating.

The outlook was revised to negative from stable.

The negative cash flow implications of tax reform, along with higher debt incurred to fund its elevated capital investment plan, are expected to weaken CenterPoint Energy Houston Electric's key financial metrics more than projected when tax reform was passed, Moody's explained.

Going forward, the agency said it expects cash flow from operations before changes in working capital-to-debt will be in the 15% to 17% range, lower than historical levels of closer to 20% and weakly positioning CenterPoint from a financial metric standpoint.

The outcome of the utility's pending rate case, which is expected in October, will be important in determining the future financial strength of the utility, Moody's added.

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