Moody’s changes PNM to stable

Moody’s Investors Service said it revised the outlook for PNM Resources, Inc. and Public Service Co. of New Mexico (PNM) to stable from positive.

At the same time, the agency affirmed both companies’ long-term ratings, including PNM Resources' Baa3 issuer and senior unsecured ratings and PNM's Baa2 issuer and senior unsecured ratings.

"The change in outlooks to stable from positive is driven by the challenging New Mexico regulatory environment, combined with weaker cash flow from tax reform over the next couple of years," Robert Petrosino, Moody's vice president and senior analyst, said in a news release.

"PNM has had contentious rate case proceedings the last few years including regulatory disallowances, modified settlements, appeals to the New Mexico Supreme Court and uncertainty on recovery of its coal investments, resulting in a difficult construct under which PNM can earn its allowed return."

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