Moody's lowers Chugoku Electric to negative

Moody's Investors Service said it changed Chugoku Electric Power Co., Inc.'s outlook to negative from stable and affirmed its A3 issuer and senior secured bond ratings.

Chugoku Electric's financial metrics are expected to be weak in the next 12- to 18-months, Moody's explained.

As the Japanese utilities industry deregulates, the agency said it will increasingly place a higher importance on financial metrics to offset the decline in regulatory protections.

Chugoku Electric's financial metrics are some of the weakest among the Japanese utilities rated, Moody's added.

The agency also said it does not expect meaningful improvements in the company's credit profile and anticipates that leverage will remain very high, leaving little cushion for its ratings level.

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