Moody's affirms Semco

Moody's Investors Service said it affirmed Semco Energy, Inc.'s ratings on its debt obligations at Ba2 senior unsecured and changed the rating outlook to stable from negative.

This rating action follows Semco's successfully clearing the hurdles cited in Moody's negative outlook, including the issuance of common stock and the renewal of its credit facility, the agency said.

The equity issuance and debt reduction neutralize the incremental leveraging, which occurred with the preferred stock refinancing in March, precipitated the agency's negative outlook and also restored Semco's near-term financial outlook to levels in line with Moody's expectations for its current ratings.

The stable rating is based on Moody's understanding of Semco's commitment to improve credit quality, to eschew diversification from its core regulated gas businesses and to finance any growth investments so as not to disrupt further stabilization of its financial position, the agency added.

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