Add to balance / Manage account | User: | Log out |
Prospect News home > News index > List of issuers L > Headlines for Laclede Gas Co. > News item |
Moody's downgrades Laclede
Moody's Investors Service said it downgraded Laclede Group, Inc.’s provisional senior debt rating to Baa2 from Baa1, affirmed Laclede Gas Co.’s senior secured debt at A1 and changed the outlook to stable from negative.
The outlook was changed to negative on April 7 following the announcement that Laclede had entered into a definitive agreement to acquire Alabama Gas Corp. from Energen Corp. The $1.6 billion total purchase price includes $1.35 billion of cash for the equity value of Alabama Gas plus the assumption of $250 million of debt. Laclede will use a combination of cash, new equity and new debt at the holding company level to fund the transaction.
The agency said the downgrade reflects an expected increase in parent level debt to more than 30% of total consolidated debt to fund the pending acquisition of Alabama Gas, leading to a widening of the ratings notching between the parent company and its principal utility subsidiary. The increase in debt is projected to be $625 million.
The stable outlook reflects Moody’s expectation that the acquisition will be completed in a manner consistent with management's publicly stated plan, that the integration will be executed without jeopardizing customer safety and reliability and that the overall operating performance of Laclede going forward will remain at levels consistent with the current rating.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.