S&P revises American States Water to stable

Standard & Poor's said it revised its rating outlook on American States Water Co. and its wholly owned subsidiary, Golden State Water Co., to stable from positive.

Existing ratings, including the A+ issuer credit ratings, were affirmed.

S&P said the outlook revision reflects the company's announcement that it has authorized the repurchase of up to 1.2 million shares.

"We expect that this will lead to weaker than previously expected cash flow measures," S&P credit analyst Obie Ugboaja said in a news release.

Specifically, the agency now expects that funds from operations to debt will weaken to about 30%, which is consistent with the middle of the range for the intermediate financial risk profile. The share repurchase program does not change S&P’s view of the company's financial policy because it is intended to enable the company to achieve a shareholders' equity ratio that is more reflective of an appropriate equity ratio for its subsidiaries.

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