S&P trims Ipalco

Standard & Poor's said it lowered its long-term issuer credit rating on Ipalco Enterprises Inc. and its utility subsidiary to BB+ from BBB-.

At the same time, S&P affirmed Ipalco's BB+ senior unsecured rating. S&P assigned a recovery rating of 3, indicating an expectation that lenders would receive meaningful (50% to 70%) recovery of principal in a default.

S&P also affirmed IP&L's BBB+ senior secured issue rating, based on a 1+ recovery rating.

S&P said the downgrade reflects its assessment that the cumulative value provided by structural protections, including an independent director in place to help protect Ipalco from a voluntary bankruptcy initiated by the parent, who also participates in all board votes and has decision making authority, a non-consolidation opinion, covenants, a separateness agreement, and some dividend limitations, insulate the credit quality of Ipalco and IP&L from their weaker parent, AES Corp.

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