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Fitch downgrades Southern
Fitch Ratings said it downgraded the long-term issuer default rating of Southern Co. to A- from A, along with its short-term issuer default rating at F1.
The ratings also were removed from Rating Watch negative, where they were placed in August 2015 following news of an agreement to acquire AGL Resources Inc. in an all-cash transaction, Fitch said.
The downgrades reflect the expected degradation in the company’s credit metrics following the closing of the predominantly debt-financed acquisition, the agency said.
Fitch said it expects the acquisition to close in the second half of 2016.
Fitch also said it downgraded the long-term issuer default rating of Mississippi Power Co. to BBB from BBB+ and revised its outlook to stable from negative.
The proposed $8 billion cash acquisition, which will be largely debt-funded, results in a meaningful increase in consolidated leverage compared to Southern's current and projected stand-alone financial condition, the agency said.
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