Moody’s upgrades PPL credit rating following acquisition of Narragansett Electric
Moody’s Investors Service upgraded the investment-grade credit rating of Allentown, Penn.-based PPL Corporation and PPL Capital Funding, Inc., following the corporation’s acquisition of The Narragansett Electric Company, currently doing business as Rhode Island Energy.
PPL’s credit rating, including its issuer rating, PPL Capital Funding, including its senior unsecured rating, rose from Baa2 to Baa1. Moody’s also upgraded Narragansett Electric’s senior unsecured and issuer ratings from Baa1 to A3 and preferred stock securities from Baa3 to Baa2.
“As a result of our strategic repositioning, today’s new, U.S.-focused PPL has one of the utility sector’s best credit profiles, a balance sheet capable of supporting robust growth without equity needs for the foreseeable future, and a de-risked business plan to drive significant value for our shareowners and customers moving forward,” said PPL President and Chief Executive Officer Vincent Sorgi. “We believe these ratings upgrades also reflect the quality of our new regulated utility mix, our disciplined approach to deploying capital, and the constructive regulatory jurisdictions in which we operate.”
Moody’s cited PPL’s improved overall business risk profile and credit supportive regulatory environments as factors in the companies’ upgrades. The upgrade of Narragansett Electric’s rating reflects the “expectation that the utility will be able to maintain its strong, stable credit profile going forward without the credit pressure from its previous highly leveraged parent company,” Moody’s said.
Moody’s also cited improved corporate governance, given PPL’s agreement to strengthen ring-fencing provisions to insulate the Rhode Island utility from its parent company, as a key driver of Narragansett Electric’s upgrade.
