Moody’s snips Alliant Energy, view to stable

Moody’s Investors Service said it downgraded the ratings of Alliant Energy Corp. and Wisconsin Power & Light Co., including their senior unsecured ratings to Baa2 from Baa1 and A3 from A2, respectively. Moody’s affirmed the rating of Interstate Power and Light Co. at Baa1.

“Alliant and WPL are exhibiting weaker financial profiles over the next few years because high capital expenditures will primarily be financed with debt. IPL’s capital spending will decline going forward and thanks to credit supportive regulatory developments in Iowa, key financial credit ratios will improve to the high-teens range,” said Nana Hamilton, a Moody’s assistant vice president and analyst, in a press release.

The downgrade of Alliant’s ratings mirrors the agency’s estimate the corporate finance policies being employed to finance capital spending will continue to be lean towards debt. “The downgrade also considers the execution risk associated with the company’s sizeable capital expenditure program, particularly at WPL, as well as the structural subordination of parent level debt (about 20% of consolidated debt) relative to the subsidiaries’ existing debt,” said Moody’s.

The rating outlooks for Alliant, WPL and IPL have been changed to stable from negative. The stable outlook indicates Moody’s expectation the three companies will continue to benefit from credit supportive regulatory outcomes and produce financial ratios that are in line with their ratings, the agency said.

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