Moody's affirms Energen, cuts Alabama Gas

Moody's Investors Service said it confirmed the rating for Energen Corp. at Baa3 with a negative outlook.

At the same time, the agency downgraded Alabama Gas Corp. (Alagasco) to A2 from A1 with a negative outlook.

"Moody's believes that Energen could reduce leverage meaningfully by the end of 2014 which could salvage its investment grade rating. However, Moody's outlook remains negative to reflect the possibility that the company may not achieve its targets for reserve and production increases that are necessary to achieve the leverage reduction," Moody's vice president Stuart Miller said in a news release.

"In addition, in 2012 Alagasco's leverage increased to a level that no longer supports an A1 rating. With no apparent driver for debt reduction, Moody's has downgraded the rating to A2 to be more in line with the ratings of other gas utility companies," Miller added in the release.

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