Moody’s reviews TECO; gives Emera, debt Baa3

Moody's Investors Service said it assigned a new Baa3 issuer rating to Emera Inc. and a Baa3 senior unsecured rating to Emera US Finance LP's new note issuance of up to $3.4 billion.

The agency also assigned a Ba2 rating to Emera's unsecured subordinated notes of up to $1.2 billion due 2076.

The outlooks are stable.

At the same time, Moody's placed the long-term ratings of TECO Energy, Inc. and its subsidiaries on review for downgrade, including the Baa1 senior unsecured ratings of TECO Energy; the Baa1 senior unsecured rating of TECO Energy's financing subsidiary, TECO Finance, Inc.; and the A2 issuer and senior unsecured ratings of Tampa Electric Co.

"Emera's Baa3 rating assumes the TECO Energy acquisition will close imminently, and reflects the company's diverse and largely regulated business risk profile, offset by very high consolidated leverage," Moody’s vice president and senior analyst Jeff Cassella said in a news release.

"Concurrently, TECO and its subsidiaries' review for downgrade is prompted by Emera's significant use of debt to finance the acquisition, and the lack of meaningful ring-fence type provisions designed to insulate TECO's credit profile."

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