S&P affirms Black Hills, SourceGas

Standard & Poor’s said it affirmed its ratings on Black Hills Corp. and its subsidiary Black Hills Power, including the BBB issuer credit ratings. S&P also affirmed Black Hills Corp.’s BBB senior unsecured debt rating and Black Hills Power’s A- senior secured debt rating.

The outlook is stable.

At the same time, S&P affirmed its ratings on SourceGas LLC, including the BB+ issuer credit rating, and revised its outlook on SourceGas LLC to positive from stable.

Black Hills Corp. announced it has entered into a definitive agreement to acquire SourceGas Holdings LLC from investment funds managed by Alinda Capital Partners and GE Unit GE Energy Financial Services for $1.9 billion, including reimbursement of an estimated $200 million in capital expenditures through closing and the assumption of $720 million of debt projected at closing.

The purchase is supported by a fully committed bridge facility from Credit Suisse.

The company expects to permanently finance the acquisition with $720 million of assumed debt, $450 million to $550 million of new debt, $575 million to $675 million of equity and equity-linked securities, and the remainder with cash on hand and revolver draws.

Black Hills Corp. will operate the acquired company under the name Black Hills Energy.

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