Moody's: TNP Enterprises on downgrade review

Moody's Investors Service said it placed the debt ratings of TNP Enterprises Inc. and its principal operating utility subsidiary, Texas-New Mexico Power Co., on review for possible downgrade.

The ratings affected include TNP's Ba2 bank credit facility, Ba3 subordinated, and B1 preferred stock; and Texas-New Mexico Power's Baa3 senior unsecured ratings.

Moody's said TNP is exhibiting weak cash flow coverage metrics and has high leverage, and the timing for improvement in coverages is uncertain. Although the utility subsidiary, Texas-New Mexico Power Co., filed its stranded cost estimates with the Public Utility Commission of Texas on Friday, it is Moody's opinion that the inclusion of about $100 million related to capacity auction true-up introduces additional complexity to the proceeding.

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