Moody’s cuts Eversource

Moody's Investors Service said it downgraded Eversource Energy's ratings, including its long-term issuer and senior unsecured ratings to Baa2 from Baa1. Moody's also trimmed Nstar Electric Co.'s ratings, including its long-term issuer and senior unsecured ratings to A2 from A1. The agency changed the outlooks to stable from negative.

Eversource is in the process of selling its 50% stakes in three joint-venture offshore wind farm projects. The projects are South Fork Wind, Revolution Wind, and Sunrise Wind. On Oct. 12, the New York Public Service Commission rejected Eversource and partner Orsted A/S request for the Sunrise Wind project's offtake power purchase price.

The company previously disclosed a rejection of the price hike could add a $450 million pre-tax impairment to the offshore wind project's investment value

"Eversource's rating downgrade reflects a financial profile that will remain weak and no longer supportive of the previous Baa1 rating," said Jeff Cassella, a Moody’s vice president and senior credit officer, in a press release.

"The downgrade also reflects heightened uncertainty as to whether the company's pending offshore wind project sale will be executed in part or as a whole and whether any additional balance sheet strengthening actions will be needed over the next year to offset the challenges associated with the transaction," added Cassella.

The agency said the revised outlook reflects an expectation that Eversource will complete the wind projects sales in 2024, that any potential contingent liabilities related to the sale will be manageable, and that it will ultimately return to a predominantly low-risk regulated utility holding company.

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