The two major rating agencies are divided over their assessment of troubled energy company Aquila, with Moody’s cutting its rating to junk and Standard & Poor’s (S&P) maintaining its investment-grade standing.Although Aquila today welcomed news that S&P had removed the company from CreditWatch, the rating agency did downgrade Aquila from BBB to BBB-, its lowest investment-grade rating.
"We're extremely encouraged by Standard & Poor's decision to preserve our investment-grade credit rating," said Robert Green, Aquila president and chief executive. "Their action is confirmation that we're taking the right steps. We'll continue to focus on executing our asset sales programme and exiting the wholesale energy marketing and trading business as part of our continuing commitment to a stronger credit profile."
S&P placed Aquila on CreditWatch on April 30. Although Aquila has maintained investment-grade ratings with S&P, and so far Fitch’s, the outlook is still negative, S&P said.
This is based on the risk that Aquila may fall short of the amount of asset sales necessary to restore its balance sheet to appropriate levels of debt and equity, S&P said.
S&P analyst Todd Shipman was not immediately available for comment.
More on Structured Products
Lower deposit rates will force investors to take more risk
Software from Calastone seeks to bring structured products into the digital age
Regulation and low interest rates pose greatest challenge
Tim Mortimer on the value of put options in structuring
Sign up for Risk.net email alerts
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
Nominated for two technology awards
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.