Moodys.com
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S ASSIGNS FIRST-TIME (P)Baa1 RATING TO ENERGY EAST CORPORATION'S SHELF REGISTRATION OF DEBT SECURITIES; ALSO UPGRADES CENTRAL MAINE POWER COMPANY'S CREDIT RATINGS (SR.UNSEC. TO A3)

09 Jun 2000
MOODY'S ASSIGNS FIRST-TIME (P)Baa1 RATING TO ENERGY EAST CORPORATION'S SHELF REGISTRATION OF DEBT SECURITIES; ALSO UPGRADES CENTRAL MAINE POWER COMPANY'S CREDIT RATINGS (SR.UNSEC. TO A3) Moody's Investors Service assigned a (P)Baa1 first-time rating to the $500 million S-3 shelf registration for prospective issuance of unsecured debt securities of Energy East Corporation. In conjunction with the assignment of Energy East's rating, Moody's is also upgrading the senior unsecured debt ratings of Central Maine Power Company (CMP) to A3 from Baa1.

The (P)Baa1 rating reflects Energy East's relatively low-risk business strategy, which primarily focuses on growing its regulated energy distribution operations, as well as the predictable and sustainable cash flows that will primarily take the form of upstreamed dividends from its regulated subsidiaries. The rating also takes into account Energy East's structurally subordinated access to its subsidiaries' cash flows, along with the risks present in what is expected to remain a relatively small portfolio of non-regulated business investments.

The upgrade of CMP's ratings primarily reflects the expected benefits that will result from its affiliation with a larger family of companies once Energy East completes the remainder of its pending acquisitions. Indeed, Moody's anticipates that CMP will benefit from merger-related cost savings, which will likely result in improving debt protection measurements.

CMP's ratings upgraded include its senior unsecured debt and issuer ratings to A3 from Baa1 and its preferred stock to "baa1" from "baa2". CMP's short-term credit rating for commercial paper is not affected by the upgrades and is confirmed at Prime-2. The outlook for all of CMP's ratings is stable.

A stable outlook is also assigned to Energy East's first-time (P)Baa1 rating, largely reflecting the stable rating outlooks for the company's currently rated utility subsidiaries, as well as for those companies that it expects to acquire in the near future.

Moody's notes that Energy East is transforming itself into a super-regional energy services and delivery company through four mergers that were announced during 1999. New York State Electric and Gas Corporation, or NYSEG (currently rated A3 for its senior secured debt), is expected to provide the majority of the consolidated cash flow to help service Energy East's fixed obligations. However, Energy East's February 2000 acquisition of unrated Connecticut Energy Corporation, which conducts gas distribution operations through its subsidiary Southern Connecticut Gas Company (currently rated A2 for its senior secured debt), introduced another source of regulated cash flow into the consolidated picture. Furthermore, the impending acquisitions of three other entities in the Northeast: unrated CMP Group, Inc. (the parent company of the electric utility, Central Maine Power Company, which is now rated A3 for its senior unsecured debt); unrated CTG Resources, Inc. (the parent company of the gas distribution utility, Connecticut Natural Gas Corporation, which is currently rated A3 for its senior unsecured debt); and unrated Berkshire Energy Resources (the parent company of the unrated gas distribution utility, Berkshire Gas Company), will add even more geographic and regulatory diversity to the company's consolidated revenue and cash flow streams. At the same time, these acquisitions will increase the size and scope of Energy East's operations, ultimately placing the company in a better competitive position in the changing electric and gas markets in the Northeast.

An important part of Moody's analysis of Energy East's credit risk profile involves a weighted average risk assessment of the prospective cash flow streams that each of the aforementioned utility companies will be providing to the parent company once all of the acquisitions are completed. In doing so, Moody's notes that all of the companies benefit from a generally supportive regulatory and legislative environment, which should enable them to substantially recover those remaining costs that might become stranded due to competition in the electric and gas markets, as well as help them maintain their respectively sound credit profiles. The sound credit profiles are currently based in part on the significant amounts of cash on hand from the sale of non-nuclear generation assets by NYSEG and CMP, which will be used to help fund the cash portion of the impending acquisitions. The use of the cash for this purpose helps limit the acquisition-related debt financing to the $500 million available under Energy East's shelf registration. Over the intermediate term, Moody's expects that NYSEG and CMP will also divest their nuclear assets, which will further improve their respective business risk profiles. We also expect that NYSEG will take steps to return its balance sheet to previous levels of debt and common equity.

Overall, the utility company credit profiles are characterized by flexible balance sheets and solid, predictable cash flow coverage of interest expense ratios that compare favorably to similarly rated peers. The utility companies should also benefit in the future from good opportunities to penetrate natural gas distribution markets, especially in Connecticut and Maine, and from anticipated costs savings, which together are expected to approximate 5%-7% of non-fuel operating and maintenance expenses once the merger synergies take full effect. At the same time, as Moody's analyzes Energy East on a standalone basis, we anticipate that adequate free cash flow will be available to comfortably protect Energy East's own fixed income investors, while also meeting anticipated dividend payments to its common shareholders.

As management considers growth opportunities in the future, fixed income investors at any of the utility company levels should be wary that a portion of that growth could come from Energy East's additional investments in non-regulated businesses, which carry higher business risks than regulated operations. This risk should not, however, cause undue credit concerns because of the holding company structure that exists, as well as management's historically prudent approach to such investments. It is also important to note that management is likely to use excess cash to continue buying back Energy East common stock to enhance returns for the company's shareholders, while maintaining a minimum target consolidated common equity ratio of about 40%.

Going forward, we expect that management will consider additional acquisition opportunities that arise, provided they are consistent with its plans to expand its energy distribution operations. Any significant divergence from the conservative approach taken with respect to the aforementioned acquisitions to date could add pressure to Energy East's ratings, as well as those of its subsidiaries. In the meantime, prospects for improvement in Energy East's credit quality will hinge importantly on the ability of its operating subsidiaries to improve their respective credit profiles. This is especially important as relates to NYSEG since, absent another significant acquisition, it should continue to contribute a majority of the cash flow to be upstreamed to its parent over the foreseeable future. Key prospective issues that are likely to have a bearing on NYSEG's future credit quality are the extent to which it can be successful in dealing with the risks tied to its role as provider of last resort for customers who do not choose an alternative power supplier, strengthening its balance sheet, and coordinating with its affiliated utility companies to reap maximum synergy savings for its parent company. Finally, Moody's will closely follow the ongoing efforts by Energy East's regulated utilities to establish multi-year performance-based regulatory plans, which would help clarify the extent to which merger-related synergies can be retained.

Energy East Corporation is a super-regional energy services and distribution company, with headquarters in Albany, New York, Stamford, Connecticut, and Portland, Maine.

No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR  PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​​​
Moodys.com