Moody's changes outlook on Spire units

Moody’s Investment Service said it changed its outlook for Spire Alabama Inc. to negative from stable and its outlook on Spire Missouri Inc. to stable from negative.

The agency concurrently affirmed Spire Alabama’s A2 senior unsecured rating and Spire Missouri’s A1 senior unsecured rating.

"Spire Alabama's negative outlook reflects credit metrics that have deteriorated materially since 2021 and are expected to now be sustained at lower levels than the utility had historically achieved", said Jillian Cardona, a Moody’s analyst, in a press release.

For the last 12 months ended Dec. 31, 2022, Spire Alabama's ratio of cash flow from operations before changes in working capital (CFO pre-WC to debt) was an anemic 6.7% due to the adverse effect of higher natural gas prices incurred last year, the agency noted.

The improved outlook for Spire Missouri considers the utility's credit-supportive rate case outcome in Missouri, which will enable the company to improve its credit metrics to levels that are appropriate for its current A1 senior secured rating, Moody’s said. In November, the Missouri Public Service Commission approved a settlement for the company that included a $72 million rate increase.

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