Moody's may downgrade Hoosier Energy

Moody's Investors Service said it placed the Baa1 issuer rating and A3 secured ratings of Hoosier Energy Rural Electric Cooperative Inc. on review for possible downgrade.

The agency said the rating action is prompted by the litigation related to Hoosier's existing leveraged lease transaction with John Hancock Life Insurance Co., its potential weakening liquidity position to deal with any near-term eventualities and the possibility for longer-term issues related to its financial and operating flexibility given a possible unfavorable outcome.

The review process will primarily consider how Hoosier addresses any cash calls on the company related to the litigation, any potential cross-defaults if the company is unwilling or unable to meet those cash calls and the extent that an appropriate amount of liquidity is maintained for its ongoing operations, Moody's said.

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