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Fitch changes CenterPoint Energy to stable
Fitch Ratings said it affirmed CenterPoint Energy Inc.'s (CNP) long-term issuer default rating at BBB and revised the outlook to stable from positive.
The actions follow CenterPoint’s announcement to acquire Vectren Corp. for about $6 billion in cash.
The ratings for CenterPoint Energy Houston Electric (A-/stable) and CenterPoint Energy Resources Corp. (BBB/positive) are unaffected at this time.
“The acquisition will modestly increase CNP's exposure to regulated utility operations and improve geographic diversification. Pro forma CNP's operating income in 2019, including equity earnings from investment in Enable Midstream Partners (BBB-/stable), are estimated to be comprised of approximately 70% regulated utilities, compared to 65% without Vectren,” Fitch said in a news release.
“Gas utilities will represent 31% of the pro forma operating income, up from 24%. Fitch views this trend favourably as gas utilities enjoy more supportive regulation, robust rate-base growth through politically uncontroversial gas infrastructure modernization programs and have less exposure to environmental control mandates.”
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