Fitch rates Arizona Public Service notes A

Fitch Ratings said it assigned an A rating to Arizona Public Service Co.’s issuance of $250 million of senior unsecured notes due 2026.

The senior unsecured notes rank pari passu with existing senior unsecured debt, Fitch said.

The proceeds will be used to refinance a like amount of recently matured long-term debt, the agency said.

The utility has a stable outlook, reflecting its relatively predictable cash flows and a constructive regulatory environment in Arizona, Fitch explained.

The company’s credit metrics are expected to remain strong with an estimated EBITDAR coverage of about 6x through 2018 on average, the agency said.

The company’s debt-to-EBITDAR ratio is expected to weaken modestly due to high capital expenditures, but will remain better than 3.5x through 2018, Fitch said.

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