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Moody’s changes Southern to negative
Moody's Investors Service said it affirmed the ratings of Southern Co. (Baa1 senior unsecured, Prime-2 short-term rating for commercial paper) and changed the outlook to negative from stable.
The agency also affirmed the ratings and outlooks of Southern subsidiaries Alabama Power Co. (A1 stable), Georgia Power Co. (A3 stable), Gulf Power Co. (A2 stable), Mississippi Power Co. (Baa2 negative); Southern Power Co. (Baa1 stable); Southern Electric Generating Co. (A2 stable); and Southern Co. Funding Corp. (Prime-2 stable).
"The negative rating outlook on the Southern Co. is prompted by today's announcement that it has agreed to acquire AGL Resources, Inc. (AGL, unrated), an Atlanta based natural gas distribution company, for approximately $8 billion in cash," associate managing director Michael G. Haggarty said in a news release.
"The transaction will result in a significant increase in debt at the Southern holding company level at a time when holding company debt has already been increasing, partly to support funding needs at utility subsidiary Mississippi Power and portfolio growth at wholesale power company Southern Power."
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