S&P revises Otter Tail view to negative

S&P said it revised the outlook for Otter Tail Corp. to negative from stable and affirmed the company’s BBB issuer rating. S&P also affirmed Otter Tail Power Co.’s BBB+ ratings.

“The negative outlook on OTCC reflects our baseline forecast of weakening financial measures over 2020 and 2021 due to the current pandemic and economic downturn. Specifically, we expect the pandemic to have a more profound impact on the company's non-utility operations, especially on the metal fabrication services, because they are more susceptible to economic downturns,” S&P said in a press release.

The agency said it forecasts OTCC's FFO to debt of about 17%-19% in 2020 and 2021 before recovering to just above 20% by 2022.

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