S&P upgrades Tucson Electric

Standard & Poor's said it raised its issuer credit rating and senior unsecured debt rating on Tucson Electric Power Co. to BBB+ from BBB.

The outlook is stable.

S&P said the upgrade reflects its view that parent UNS Energy Corp. is a "moderately strategic" subsidiary of Fortis and therefore subsidiary Tucson Electric Power Co.'s (TEP) issuer credit rating can be raised one notch, while its ratings remain one notch below Fortis' issuer credit rating.

The agency’s assessment of UNS as a "moderately strategic" subsidiary of Fortis reflects its assessment that it is unlikely for Fortis to sell UNS over the next few years, UNS is an important part of Fortis' long-term strategy, and UNS is likely to receive support from the Fortis should UNS fall into financial difficulty.

"We view TEP as a 'core' subsidiary of parent UNS reflecting our view that TEP is highly unlikely to be sold and has a strong long-term commitment from senior management," S&P credit analyst Gabe Grosberg said in a news release.

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