S&P cuts Aqua America notes

S&P said it assigned its A issuer credit rating to Aqua America Inc. and lowered the ratings on the company’s senior unsecured notes to A- from A and removed the ratings from CreditWatch with negative implications.

S&P also lowered the rating on Aqua’s subsidiary Aqua Pennsylvania Inc. to A from A+ and removed the ratings from a CreditWatch negative placement. The agency lowered the subsidiary’s senior secured issue-level rating to A+ from AA-. The recovery rating on this secured issue is 1+ The outlook for both entities is stable.

“We expect Aqua to complete its $4.3 billion acquisition of PNG and its subsidiaries, including operating utilities Peoples Natural Gas Co. LLC, Peoples Gas Co. LLC, and Delta Natural Gas Co. Inc. from infrastructure funds managed by investment firm SteelRiver Infrastructure Partners LP. This follows regulatory approvals from several states including Pennsylvania, Kentucky and West Virginia, approving the acquisition. Aqua subsequently changed its name to Essential Utilities Inc. on Feb. 3, 2020,” said S&P in a press release.

The stable outlooks reflect S&P’s expectation the company will effectively manage its regulatory risk with the addition of PNG Cos., while also benefiting from additional scale, diversity and a significant increase in customer base.

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