Moody’s cuts WEC Energy

Moody's Investors Service said it downgraded the long-term ratings of WEC Energy Group, Inc., Wisconsin Energy Capital Corp. (WECC) and Integrys Holding, Inc., including their senior unsecured ratings to Baa1 from A3.

This concludes the review for downgrade initiated on June 1.

Concurrently, the agency affirmed WEC’s and Integrys’ Prime-2 short-term commercial paper ratings.

The outlooks are stable.

"The downgrade of WEC, WECC, and the Integrys entities reflects our expectation that the negative cash flow impact of tax reform, along with incremental debt to fund capital expenditures, will cause a deterioration in consolidated metrics," Moody’s vice president, senior analyst Nativadad Martel said in a news release.

"This will be exacerbated by the absence of equity financing to mitigate these adverse developments."

Specifically, the agency said it anticipates a gradual reduction of WEC's consolidated CFO pre-W/C to debt to the 16%-17% range over the next few years from 20% or higher historically.

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