S&P trims DPL, DP&L

S&P said it lowered the ratings on DPL Inc. and its subsidiary Dayton Power and Light Co. to BB from BBB- following the Public Utilities Commission of Ohio issuance of an order invalidating key parts of DPL’s electric security plan. The plan had included a distribution modernization rider.

S&P also downgraded the rating on DPL’s senior unsecured debt to BB and lowered the issue-level rating on DP&L’s first-mortgage bonds to BBB.

The agency assigned a 3 recovery rating to DPL’s senior unsecured debt and left the 1 recovery rating on DP&L’s first mortgage bonds unchanged.

“Our decision to downgrade DPL Inc. and its subsidiary follows the PUCO decision, which effectively invalidated the DMR for subsidiary DP&L. We expect the impact of the PUCO order to weaken DP&L’s financial measures materially, indicative of a highly leveraged entity,” S&P said in a press release.

The agency said it sees PUCO’s order as indicative of the company’s inability to manage its regulatory strategy.

The outlook is negative.

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