Moody's reviews Otter Tail

Moody's Investors Service said it placed Otter Tail Corp.'s A3 senior unsecured rating under review for downgrade.

The review follows the Jan. 7 order of the Minnesota Public Utilities Commission approving the restructuring of Otter Tail to establish a separate subsidiary corporation to conduct its utility operations, according to the agency.

The outlook is negative, reflecting expectation that the consolidated credit profile of the company would continue to weaken, primarily as a result of its significant capital expenditure programs at its utility division.

The review recognizes that debt at the holding company level will be structurally subordinated to debt that is likely to be assumed by the newly formed, and currently unrated, utility subsidiary.

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