S&P: Westar Energy outlook now positive

Standard & Poor's said it affirmed its BB+ corporate credit ratings on electric generation and transmission company Westar Energy Inc. and subsidiary Kansas Gas & Electric Co. and revised the outlook on the companies to positive from developing.

S&P said the outlook revision results from meaningful actions that Westar has taken to strengthen its aggressively leveraged balance sheet and improve its overall financial profile, as well as continued expectations for additional credit enhancing initiatives.

"As expected, the company has entered into a definitive agreement to sell its 88% stake in Protection One Inc., its monitored security business. Importantly, this critical step moves Westar closer to becoming a pure vertically integrated electric utility," said S&P credit analyst Barbara Eiseman.

The sale, which is expected to close this quarter, is subject to Kansas Corporation Commission approval. Since KCC has already approved a settlement agreement regarding Westar's restructuring plan, S&P said it expects the commission to endorse the divestiture.

"The sale price, while lower than originally envisioned, still enables Westar to reduce its heavy debt burden, but increases the future amount of common stock issuances needed to achieve investment-grade ratings," Eiseman said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.