Moody’s places Miss. Power on review for credit downgrade
Moody’s Investor Service late last week placed Mississippi Power Co.’s ratings on review for downgrade.
It’s the second rating agency in two weeks to either downgrade the company’s credit rating or consider doing so. On July 3 Fitch Ratings downgraded MCP from “A” to A-.” Fitch also revised the company’s rating outlook from “stable” to “negative.”
Moody’s does not sound prepared to go that far, at least not yet. In a press release, Moody’s said it would keep Southern Co.’s ratings outlook stable, and that the downgrade review would not result in MPC’s rating dropping more than one notch from its current rating of “A2.”
Like Fitch, Moody’s said the company’s credit rating likely would not completely recover until the Kemper County coal plant started commercial operation, which is scheduled for May 2014. Both agencies cited decreased cash flow as one of the main drivers of their decision.
Cash flow, company officials have said, will suffer until cost recovery is allowed for the Kemper facility. On June 22, public service commissioners voted 3-0 not to consider rate increases tied to the coal plant until the Mississippi Supreme Court has its say on the Sierra Club’s latest challenge to it.