S&P revises Entergy New Orleans view to negative

S&P said it revised the outlook for Entergy New Orleans LLC to negative from stable but affirmed its BBB+ issuer rating.

“The outlook reflects our baseline forecast of weakening financial measures for 2020, the service territory's continued susceptibility to severe storms, and the lack of significant financial support from parent Entergy. Specifically, we expect ENO's service territory to have ongoing exposure to severe storms like the recent Hurricane Laura, potentially leading to significant liabilities and damages to the infrastructure,” S&P said in a press release.

The company’s plans to add gas and solar-based generation will lead to increased capital expenditures, which S&P said it sees being at least partly financed through added debt.

“Collectively, based on the above factors and our baseline forecast, which includes higher capital spending of about $220 million and $170 million for 2020 and 2021, respectively, we forecast ENO's FFO to debt to remain weak at about 13%-15% for 2020-2021,” S&P said.

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