Moody's raises Sierra Pacific Resources, units

Moody's Investors Service said it upgraded the corporate family rating of Sierra Pacific Resources to Ba3 from B1 and upgraded the company's senior unsecured debt rating to B1 from B2.

Moody's also upgraded the ratings of the company's utility subsidiaries Nevada Power Co. (senior secured to Ba1 from Ba2) and Sierra Pacific Power Co. (senior secured to Ba1 from Ba2).

The outlook for all affected companies is stable.

Sierra Pacific Resources' speculative grade liquidity rating, which was not under review for possible upgrade, is affirmed at SGL-3.

Moody's said the upgrade reflects 1) improved financial flexibility throughout the Sierra Pacific Resources family; 2) good prospects for the company to further improve the consolidated capital structure; 3) Moody's view that the much improved regulatory relationships that both Nevada Power and Sierra Pacific Power now have with the Public Utility Commission of Nevada will continue; 4) and expectations that Sierra Pacific Resources' consolidated funds from operations can be maintained in the range of 10% to 12% of adjusted debt over the next two years.

These factors help balance Moody's concern that Sierra Pacific Resources' leverage will continue to be high, despite the expected improvement over the next couple of years.

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