Moody's lowers NiSource outlook to negative

Moody's Investors Service said it changed NiSource Inc.'s outlook to negative from stable and affirmed the debt ratings of the company and its subsidiaries.

The agency said that the change in outlook indicates the near-term risk of erosion in the company's already weak credit metrics, following the implementation of the company's new long-term business plan that entails a significant step-up in capital expenditures and regulatory activity.

"NiSource has spent much of the past seven years conserving cash flow while restructuring its operations and balance sheet," said Moody's vice president Mihoko Manabe.

"This shift in the company's orientation towards earnings growth brings potential for more debt and execution risk."

According to the company, the long-term plan is designed to increase earnings meaningfully in 2011 through rounds of rate filings and a capital investment program of more than $1 billion a year. In the interim, earnings are expected to remain flat, Moody's said.

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