Moody's upgrades Oncor

Moody's Investors Service said it upgraded Oncor Electric Delivery Co. LLC’s senior secured debt rating to Baa1 from Baa3. The outlook remains positive.

The agency said the Baa1 rating reflects the stability and predictability of Oncor's low-risk rate regulated business, the credit protection provided by the uncontested ring-fence provisions and Moody’s expectation that oversight from the Public Utility Commission of Texas will continue to substantially mitigate Oncor from any uncertainties associated with its parent holding companies.

The positive outlook suggests that additional upgrades are likely over the next 12 to 18 months and reflects the continued presence of the strong suite of ring-fence type provisions, including the special governance rights and independent board composition; adequate sources of liquidity and Moody’s expectation that Oncor will continue to produce ratios of cash flow to debt in the high-teens to low-20% range for the foreseeable future, the agency said.

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