Moody's may cut Union Electric

Moody's Investors Service said it placed Union Electric Co.'s Baa1 issuer rating under review for downgrade and affirmed its Prime-2 rating for commercial paper. The issuer does business as AmerenUE.

The Baa2 issuer ratings of Ameren Corp. and AmerenEnergy Generating Co. were affirmed, but the outlook was changed to negative from stable.

Also affirmed were the Ba1 issuer ratings of Central Illinois Public Service Co., Cilcorp Inc., Central Illinois Light Co.'s and Illinois Power Co. The outlook is positive for the four subsidiaries.

The review of Union Electric's ratings is prompted by declining cash flow coverage metrics, increased operating costs, higher capital expenditures for environmental compliance and transmission and distribution system investment, and significant regulatory lag in the recovery of these costs, the agency said.

"Continued deterioration of cash flow coverage metrics would not be consistent with its current Baa1 rating," Michael G. Haggarty, vice president and senior credit officer, said in a written statement.

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