Moody’s changes San Diego Gas to negative

Moody's Investors Service said it changed the outlook for San Diego Gas & Electric Co. (SDG&E) to negative from stable and affirmed all of its ratings, including the A1 issuer rating, Aa2 senior secured rating and P-1 short-term rating.

"SDG&E's credit profile is weighed down by the potentially large contingent exposure created by the application of strict liability standard in California in the case of wildfires where utility equipment was determined to be the source of the fire," Moody's vice president, senior analyst Natividad Martel said in a news release.

“The increasing inverse condemnation risk exposure has caused us to reassess our view of the credit supportiveness of the regulatory environment in California. In addition, cash flow to debt metrics are also expected to be lower due to tax reform.”

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