Moody’s affirms Black Hills

Moody's Investors Service said it affirmed the Baa1 senior unsecured ratings of Black Hills Corp. and maintained the negative outlook.

The affirmation follows the completion of Black Hills’ acquisition of SourceGas Holdings (not rated). SourceGas Holdings was the parent company of SourceGas LLC (Baa1 stable), an intermediate parent company with natural gas local distribution companies (LDC) and other gas related assets.

Black Hills is now the parent holding company, which includes SourceGas' natural gas operations under its Black Hills Utility Holdings, Inc. (not rated) subsidiary.

"We are maintaining the negative outlook as we expect the combined company to spend the next 8 to 12 months integrating the operations of both companies and to manage its overall leverage as Black Hills completes the sale of the minority equity stake in its Colorado IPP asset and issues equity through its at-the-market (ATM) program," Moody's analyst Jairo Chung said in a news release.

"The negative outlook also reflects anticipated weaker consolidated credit metrics that are lower than Black Hills' recent historical range."

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