Moody’s cuts WGL, Washington Gas

Moody’s Investors Service said it downgraded the long-term ratings of WGL Holdings, Inc., including its senior unsecured rating to Baa1 from A3.

The agency also downgraded the long-term ratings of subsidiary Washington Gas Light Co., including its senior unsecured rating to A2 from A1.

WGL's P-2 commercial paper and Washington Gas' P-1 commercial paper ratings were affirmed.

The outlooks remain negative.

Moody’s said the downgrade was prompted by the completion of the acquisition of WGL by AltaGas Ltd.

"While ring fencing provisions established to protect Washington Gas' financial strength are credit positive, the financial profiles of both Washington Gas and WGL have deteriorated markedly over the last two years due to a significant increase in debt to fund elevated capital expenditures," Nana Hamilton, Moody’s assistant vice president, said in a news release.

"Although we expect equity infusions from AltaGas to WGL following the close of the acquisition to rebalance WGL's capital structure, we do not see credit metrics returning to the historically robust levels that had supported the previous ratings."

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