Fitch affirms UGI Utilities

Fitch Ratings said it affirmed UGI Utilities' long-term issuer default rating at A- and senior unsecured rating at A.

The outlook is stable.

Ratings reflect the predictable cash flows of its regulated gas and electric operations, effective recovery mechanisms and strong credit metrics, the agency said.

Ratings also incorporate the impact of UGI's recently completed acquisition of Central Penn Gas, as well as the recent rate case settlements with the Pennsylvania Public Utility Commission, Fitch said.

UGI's ratings primarily reflect its standalone credit profile. UGI's parent company UGI Corp. also owns several higher business risk subsidiaries, specifically propane and energy marketing, the agency noted.

Credit concerns also include the utilities inherent sensitivity to prevailing weather conditions and volatile commodity prices that have the potential to induce customer conservation and increase working capital needs, Fitch said.

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