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 Downgrades Mississippi Power to Baa1; Outlook Stable

06 Aug 2013

Approximately $1.8 Billion of Debt Securities Affected

New York, August 06, 2013 -- Moody's Investors Service downgraded Mississippi Power Company's senior unsecured rating to Baa1 from A3 and its preferred stock rating to Baa3 from Baa2. The rating outlook is stable. Moody's affirmed the ratings of The Southern Company (Southern, Baa1 senior unsecured) with a stable outlook. This rating action concludes the review initiated on Mississippi Power's ratings on May 30, 2013.

Ratings Rationale

"The downgrade of Mississippi Power's ratings reflects the higher costs and ongoing difficulties being experienced by the company in completing the large and complex Kemper County integrated gasification combined cycle (IGCC) plant", said Michael G. Haggarty, Senior Vice President. "The utility has exhibited a considerable decline in financial metrics over the course of the construction period, which are unlikely to return to historical levels because of the planned issuance of approximately $700 million of securitized bonds after the plant becomes operational", added Haggarty.

The company's cash flow pre-working capital to debt ratio has fallen from the 20%+ range prior to the plant's construction to 12.2% in 2011 and 13.5% in 2012. This compares to financial ratio guidelines of 13% to 22% for Baa rated utilities outlined in Moody's Regulated Electric and Gas ratings methodology. Although the most recent cost increases are being funded almost solely by equity issuances at the Southern parent company, the higher debt being incurred by Mississippi Power as a result of the plant will result in lower credit metrics going forward, including CFO pre-working capital to debt in the high teens, well below the parameters for a single A rating.

We believe that issues associated with the plant may have also adversely affected the regulatory environment in which the company operates, with two of the three commissioners on the Mississippi Public Service Commission (MPSC) expressing serious concerns not only about the recent cost increases, but also the level of communication and transparency exhibited by the company during the construction process. Despite a $2.88 billion cap on project costs that largely insulates Mississippi ratepayers from additional cost increases, the historically credit supportive Mississippi regulatory environment has been strained by these developments and may not fully recover over the near term, especially if the plant continues to experience problems with the remaining construction, as well as the testing and start-up phase.

Mississippi Power has raised the cost estimate to complete the plant by nearly $1 billion over the last three months, including $540 million of cost increases announced in May and an additional $450 million announced in July. The cost of the plant now stands at $3.87 billion, or $4.7 billion if peripheral items such as the lignite mine and carbon dioxide pipeline are included. Although the latest cost estimate includes a $100 million contingency, additional cost increases over and above this contingency during the start-up and testing phase are possible.

Mississippi Power files monthly construction status reports on the plant with the MPSC and, as of June 2013, the report indicated that project was still on schedule to be brought on line in May 2014, despite the higher costs and compressed schedule. This is important in that the plant will qualify for $133 million of tax credits ($113 million net of Southern Mississippi Electric Power Association's co-ownership) allocated by the IRS in 2014 only if it is completed on time.

However, the MPSC's independent monitor on the Kemper project, Burns and Roe Enterprises, Inc., has expressed serious doubts about the company's ability to meet the May 2014 completion date as the project continues to fall behind on various schedule items, including the complex piping systems primarily between the gasifier and the combined cycle plant, despite the substantial amount of additional labor that has been brought on site. Considering the magnitude of the cost increases announced to date and the delays experienced during the construction of Duke Energy's similar Edwardsport IGCC plant in Indiana, we believe a delay in the expected May 2014 commercial date of the Kemper plant appears increasingly likely.

The stable outlook on the rating of Mississippi Power considers the strong support of the Southern parent company, which is issuing additional equity to maintain the utility's capital structure at the 50% debt to equity level, and financial metrics that are expected to return to levels appropriate for a high Baa rating once construction is completed. It also reflects the insulation of Mississippi ratepayers from additional cost increases, which should mitigate any further strain on the regulatory framework. It also reflects our view that, although there will undoubtedly be additional costs and challenges during the startup and testing phase of the project, especially as it relates to the complex gasifier, cost increases of the recent magnitude are possible but less likely going forward.

An upgrade of Mississippi Power's rating is unlikely while the company is in the process of completing construction and embarking on the testing phase of the plant. Ratings could be upgraded over the longer term if the project is completed and reaches full operation without major additional delays or cost increases; if pending investment tax credits are realized, if the regulatory environment in Mississippi returns to its historically credit supportive construct, and if metrics improve to levels consistent with an A rating, including CFO pre-working capital to debt of at least 22% on a sustained basis, including the planned securitization debt.

A downgrade could be considered if there are additional material delays, cost overruns, or other problems associated with the Kemper project, if additional regulatory and political concerns about the project materialize, or if cash flow metrics fall below the parameters expected for a high Baa rating, including CFO pre-working capital to debt below 19% for a sustained period.

The affirmation of the ratings of The Southern Company considers the large and diverse nature of its sources of cash flow, with three of its other major subsidiaries, Alabama Power Company (A2 senior unsecured, stable), Gulf Power Company (A3 senior unsecured, stable), and Southern Power Company (Baa1 senior unsecured, stable), well positioned at their respective rating levels.

Although subsidiary Georgia Power (A3 senior unsecured, stable) has experienced cost increases and delays at its new Vogtle nuclear construction project that have increased that utility's business and operating risk profile; thus far, these added costs and delays appear manageable with respect to maintaining the current A3 rating level. However, further material cost increases or schedule delays at Vogtle could lead to lower regulatory, political, and/or public support for the project, which could have negative credit and rating consequences for Georgia Power.

Issues associated with both the Kemper and Vogtle projects have weakened Southern's relative position at the Baa1 rating level. Nevertheless, the stable rating outlook on the company reflects our expectation that, despite a full regulatory calendar in 2013, most of its utility regulatory environments will continue to be credit supportive and that consolidated financial metrics will remain adequate for its Baa1 rating. It also considers Southern management's decision to finance most of the Kemper cost increases with additional equity issuances in 2013 and 2014, to support its consolidated financial metrics.

Ratings at Southern are more likely to be affected if one of its two largest subsidiaries, Alabama Power or Georgia Power, are downgraded; if there are significant additional delays or cost overruns on the Vogtle plant (and to a lesser degree the Kemper plant); or if there is significant debt issued at the parent company level to finance either of these construction projects or other capital expenditures.

Ratings downgraded include:

Mississippi Power's senior unsecured and Issuer Rating to Baa1 from A3; preferred stock to Baa3 from Baa2; and subordinated shelf to (P)Baa2 from (P)Baa1.

Ratings affirmed include:

Southern Company's Baa1 senior unsecured, Baa1 senior unsecured bank credit facility; (P)Baa2 subordinated shelf, and Prime-2 short-term rating for commercial paper.

Mississippi Power Company, headquartered in Gulfport, Mississippi is a utility subsidiary of The Southern Company, a utility holding company headquartered in Atlanta, Georgia.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Michael G Haggarty
Senior Vice President
Infrastructure Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

William L. Hess
MD - Utilities
Infrastructure Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Downgrades Mississippi Power to Baa1; Outlook Stable
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