Moody’s cuts Southwestern Public, changes Xcel view

Moody's Investors Service said it changed the outlook of Xcel Energy Inc. to negative from stable and affirmed the A3 senior unsecured and Prime-2 short-term rating for commercial paper ratings.

At the same time, Moody's downgraded the long-term ratings of Southwestern Public Service Co., including the issuer rating to Baa2 from Baa1, and affirmed its P-2 short-term rating.

The outlook for Southwestern was changed to stable from negative.

Moody's also affirmed the ratings and outlooks of Xcel’s other rated subsidiaries, including Northern States Power Co. (Minnesota) (A2 stable), Public Service Co. of Colorado (A3 stable) and Northern States Power Co. (Wisconsin) (A2 stable).

“Xcel Energy's financial ratios will be lower for longer due to the cash flow leakage associated with tax reform and an elevated investment program primarily funded with debt,” Natividad Martel, vice president and senior analyst at Moody’s, said in a news release

“The negative outlook reflects consolidated cash flow to debt ratios falling to the 16%-17% range over the next few years, down from around 20% over the last several years.”

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