S&P revises Spire outlook to negative

S&P said it revised its outlook for Spire Inc. and its subsidiaries Spire Missouri Inc. and Spire Alabama Inc. to negative from stable and affirmed their ratings including the A- issuer ratings.

“For the past two years, Spire's consolidated commercial paper outstanding has averaged roughly $1 billion, reflecting natural gas costs that the company continues to defer for future recovery. The increase in debt leverage resulted in weaker financial measures in fiscal 2022 that continued through fiscal 2023. Higher interest paid on the commercial paper borrowings is also contributing to weaker FFO for the company. Spire's FFO to debt in fiscal 2023 was 10.5%, down from 12.5% in 2022, consistently below our downgrade threshold,” the agency said in a statement.

The outlook reflects the view that Spire will deliver weaker metrics that will remain under the downgrade threshold. “Under our base case, we expect FFO to debt of 13%-14% through 2025, below our downgrade threshold of 15%,” S&P said.

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