Moody's confirms Alabama Gas

Moody's Investors Service said it confirmed the A2 senior rating of Alabama Gas Corp. This concludes the review, direction uncertain, of the company's ratings that began April 8 following the announcement that Laclede Group, Inc. (Baa2/stable) would acquire Alabama Gas from Energen Corp. (Ba1/negative) for $1.6 billion. The outlook is stable.

On Aug. 31, Laclede closed on its acquisition of Alabama Gas after receiving final regulatory approval from the Alabama Public Service Commission on July 22. Alabama Gas is now a wholly owned subsidiary of Laclede.

"The confirmation of Alabama Gas' rating considers its new ownership by a financially stronger, largely regulated parent in Laclede compared to its previous owner," Moody's analyst Jeffrey Cassella said in an agency news release. "Furthermore, Alabama Gas operates in a constructive regulatory environment, although its growth prospects are limited."

The agency said Alabama Gas' A2 rating reflects the utility's credit-supportive Alabama regulatory environment, good cost-recovery mechanisms and financial metrics that are strong for its rating.

The rating also reflects the significant leverage at the new parent company as a result of this acquisition, Moody’s added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.