S&P cuts Montana-Dakota

S&P said it downgraded Montana-Dakota Utilities’ issuer rating to BBB+ from A- but revised the outlook for its parent MDU Resources Group, Inc. and its subsidiaries Cascade Natural Gas and Centennial Energy Holdings to stable from negative.

“We expect MDU's credit metrics to weaken somewhat given its elevated capital spending plan to replace much of its coal-fired generation. Specifically, we expect MDU's FFO to debt to reflect 14%-16% over our forecast period, consistent with the lower end of the range for its financial risk profile category. As such, we revised our comparable ratings analysis (CRA) modifier to negative from stable, to reflect our expectations for weaker financial measures. The negative CRA lowers the long-term ICR by one notch,” S&P said in a press release.

MDU Resources’ stable outlook reflects an expectation it will maintain its diverse set of businesses while achieving FFO to debt of greater than 23% throughout the forecast period, the agency said.

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