S&P: PNM unchanged

Standard & Poor's said that PNM Resources' (BBB-/stable/A-3) plans to sell its natural gas utility operations to a subsidiary of Continental Energy Systems for $620 million and purchase regulated electric utility Cap Rock Energy in Texas for $202.5 million will have no net impact in the company's credit ratings.

As it's currently concentrated in New Mexico, increasing the PNM's rate base in Texas will allow it to diversify its regulatory risk, as well as add operational diversity, the agency noted.

S&P said that the use of net proceeds to reduce debt and support credit metrics will also be a key consideration going forward.

How the company deploys the net proceeds of these transactions may ultimately strengthen or weaken credit quality depending on how it balances its capital needs and financial profile, the agency added.

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