Moody's could up Allete

Moody's Investors Service said it placed the Baa2 issuer ratings on Allete, Inc. and subsidiary Superior Water, Light and Power Co. under review for upgrade. Allete's Prime-2 short-term rating for commercial paper is affirmed.

The possible upgrade reflects focus on future growth opportunities primarily within its existing energy business, its well-capitalized balance sheet, robust financial metrics, supportive regulatory environment and sound liquidity profile, the agency said.

The action more importantly reflects the end of the company's search for an actively managed business investment, Moody's noted.

Challenges include a $1.5 billion capital investment program over the next five years related to its regulated utility operations that will be funded in part with incremental debt, the agency said. Also, the company's Florida-based real estate business, which has historically generated significant cash flow, is expected to slow.

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