S&P's Westar ratings unaffected

Standard & Poor's said Westar Energy Inc.'s (BB+/positive) dividend increase detracts marginally from the company's credit quality but is already incorporated into its ratings and outlook on the company.

Westar's board of directors approved an annualized dividend of $1.00 per share on the company's common stock, representing an 8.7% increase over the current $0.92 per share. With this increase, the company will likely be at the low end of its targeted long-term payout ratio of 60% to 75% of earnings in 2006, the agency said.

Although Westar has made tremendous progress in reducing its heavy debt burden and strengthening its overall financial condition, S&P said the higher dividend, in combination with the recently authorized meager rate increase, limits discretionary cash flow available to further modestly pare debt.

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