Moody's may lift UniSource Energy, Tucson Electric

Moody's Investors Service said it placed the ratings of UniSource Energy Corp. and its subsidiary Tucson Electric Power Co. under review for possible upgrade.

Ratings under review include UniSource's corporate family rating and secured bank credit facility, both Ba2, and Tucson Electric's Ba1 issuer rating, Baa3 secured bonds and secured credit facility and Ba1 unsecured bonds. UniSource's SGL-2 speculative grade liquidity rating is unchanged.

The review reflects improved financial performance by both UniSource and Tucson Electric and Moody's expectation that this will be sustainable over the next several years. The improvements in financial performance result from deleveraging and refinancing activity that has reduced interest expense and from revenue growth that is underpinned by a customer growth rate that is well above average.

Moody's said the review will focus on the expected sustainability of UniSource's higher cash flow generation, the regulatory outlook and the company's prospects for continued success in cost management.

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