Moody's changes Wisconsin Energy outlook, reviews Integry

Moody's Investors Service said it changed Wisconsin Energy Corp.’s outlook to negative from stable following the announcement that Wisconsin Energy has entered a definitive agreement to acquire Integrys Energy Group Inc. Wisconsin Energy has an A2 issuer rating, an A2 senior debt rating and an A3 junior subordinated rating.

The agency also placed the ratings of Integry under review for upgrade after the company's disclosure that it is in the process of disposing its unregulated retail operations. Integrys has a Baa1 senior debt rating and a Baa2 junior subordinated debt rating.

The agency said the change in Wisconsin Energy's outlook to negative from stable considers that the company’s credit profile will deteriorate as it acquires a company with a weaker credit profile in a leveraged transaction.

As for Integrys, Moody’s said the elimination of the retail business will lower the company’s business risk, although the amount of holding company debt compared to Integrys' consolidated debt will remain significant (hovering around 30%).

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