S&P: stock sale helps Westar

Standard & Poor's on Friday noted that immediately following the issuance of an amended 10-K for 2003 and restatement of cash flows for three years, Westar Energy Inc. (BB+/positive/--) priced an offering of 10.5 million shares of its common stock at $20.65 per share for total gross proceeds of $216.8 million.

The size of the offering is greater than the previously announced size of 9.25 million shares. Moreover, an additional $32.5 million in proceeds to Westar is possible if the underwriters exercise the over-allotment option.

The equity issuance was expected by S&P and factored into the positive credit outlook. While upsizing of the offering brings Westar closer to achieving investment-grade ratings, additional credit-enhancing measures are needed to actually raise the ratings, the agency said.

S&P said it viewed the restatement as credit neutral, because it had no affect on total cash flow, income statements, or balance sheets. The restatements stemmed from misclassifying distributions in foreign power plants and dividend reinvestments, among others.

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