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
Chris Leone and Dushyant Chadha replace Paul Galietto
Steffen Scheuble says growth in mainstream strategies may be nearing saturation point
Capital-at-risk product pays out early if crude index is no lower than strike price in 30 months’ time
Investors’ capital at risk if underlying is below barrier level at maturity
Sign up for Risk.net email alerts
Sponsored video: MarketAxess
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
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.