Moody's lowers SoCalGas view to negative

Moody's Investors Service said it affirmed Southern California Gas Co.'s (SoCalGas) senior unsecured rating at A1, senior secured rating at Aa2 and short-term rating for commercial paper at P-1.

The outlook was changed to negative from stable.

SoCalGas is a subsidiary of Sempra Energy, Moody's said.

The negative outlook reflects the material deterioration of SoCalGas's credit metrics over the past several years, the agency explained.

The outlook also considers heightened regulatory and political uncertainty for all utilities operating in California, Moody's said.

The company's metrics were adversely affected by the October 2015 Aliso Canyon Natural Gas Storage Facility leak incident, the agency also noted.

The combination of lower metrics and political risk in California may no longer support an A1 rating, Moody's said.

A positive outcome for SoCalGas related to the Aliso Canyon investigations would help the utility to maintain its credit constructive relationship with the California Public Utilities Commisison, an important credit factor given that political risk is high in California, the agency said.

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