Moody’s lowers Origin Energy

Moody’s Investors Service said it downgraded Origin Energy Ltd.’s issuer and senior unsecured debt ratings to Baa3 from Baa2 and short-term rating to P-3 from P-2 following completion of the divestment of its stake in Contact Energy Ltd.

Origin Energy Finance Ltd.’s senior unsecured ratings were also downgraded to Baa3 from Baa2 and preference stock ratings to Ba2 from Ba1, Moody’s said.

The outlook is stable.

The actions conclude a review for downgrade that began Aug. 4, the agency said.

The downgrades reflect the completion of the Contact Energy divestment, which has a negative impact on Origin Energy’s credit profile mainly because it will reduce the group’s revenue diversity without materially improving financial leverage, Moody’s said.

Origin’s increased exposure to oil price risk outweighs the benefits from the reduction in financial leverage, the agency added.

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