Moody's lowers Energen

Moody's Investors Service said it downgraded the debt ratings of Energen Corp. (the parent, senior unsecured to Baa3 from Baa2) and confirmed those of its regulated local gas distribution utility subsidiary Alabama Gas Corp. (Alagasco, senior unsecured at A1), ending a review begun on Aug. 24.

The companies' outlook is stable.

The downgrade of Energen's ratings reflects Moody's rating the company more as an E&P company, giving more weight to the company's E&P operations that have become predominant over its lower risk legacy utility.

The confirmation of Alagasco's ratings and wider notching between the two entities are based on ring-fencing measures that separate its credit risk from those of the parent and its E&P subsidiary, the agency said.

"Energen's downgrade is not about the overall financial metrics, which have gotten stronger with energy prices," said Moody's vice president Mihoko Manabe. "Rather, our action acknowledges Energen's evolution as an E&P company and our rating reflects the higher risk."

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