S&P revises Westar Energy to positive

S&P said it affirmed the ratings on Westar Energy Inc. and subsidiary Kansas Gas & Electric Co. (KGE), including the BBB+ issuer credit ratings, and revised the outlooks to positive from negative.

Westar and Great Plains Energy Inc.'s (GPE) revised merger agreement is structured as an all-stock transaction. Under this agreement, the companies will combine into a new holding company. Following completion of the merger, Westar shareholders are expected to own about 52.5% and GPE shareholders about 47.5% of the new holding company.

S&P said the positive outlook on Westar and KGE reflects its base-case scenario following the announced merger with Great Plains Energy and that the merged entity's regulated utility operations will continue to generate sufficient cash flow to consistently achieve financial measures that support FFO to debt in the 17%-19% range from 2019 through 2021.

This range of FFO to debt places the company comfortably in the midpoint of the agency’s significant financial risk profile category.

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