Moody’s upgrades Niagara Mohawk

Moody's Investors Service said it upgraded the senior unsecured ratings of Niagara Mohawk Power Corp. to A2 from A3.

The outlook is stable.

Moody’s said the upgrade was primarily driven by additional information regarding the regulatory ring-fencing provisions that Niagara Mohawk is subject to. In particular, the agency noted that the limitation on dividend payments if leverage (as measured by debt-to-capitalization) exceeds 55% provides a material credit benefit.

The upgrade also reflects Moody's more favorable view of the relative credit supportiveness of the U.S. regulatory environment. Factors supporting this view include better cost recovery provisions, reduced regulatory lag, and generally fair and open relationships between utilities and their regulators. The U.S. utility sector's low number of defaults, high recovery rates and generally strong financial metrics provide additional corroboration for these upgrades, the agency added.

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