Moody's cuts CenterPoint Energy Houston

Moody's Investors Service said it downgraded the issuer rating and senior unsecured rating for CenterPoint Energy Houston Electric, LLC to Baa1 from A3 and the senior secured rating to A2 from A1. The outlook is stable. This rating action concludes the review started on Nov. 21.

"CEHE's financial measures will weaken more than expected due to tax reform as well as the expected lowered returns within its pending final rate order," said Robert Petrosino, a Moody’s vice president and senior analyst, in a press release. "We still view the Texas regulatory environment as being supportive to credit quality, but CEHE's ratio of cash flow pre-working capital to debt ratio is falling to the 15% to 16% range, down from around 19% historically."

The company will also be refunding to customers its unprotected deferred income taxes of about $35 million per year for the next three years.

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