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NEW YORK April 21, 2006
U.S. utilities experienced a favorable rating trend in the first quarter of 2006, with six upgrades and only three downgrades, but Standard & Poor's Ratings Services' outlook revisions for the sector were overwhelmingly negative, lowering expectations that the trend will continue, according to a report published today titled, "Industry Report Card: U.S. Utilities See Strong Start In 2006, But Steam May Run Out." "The outlook trends are important, as outlooks are a fairly good predictor of ratings changes," said Standard & Poor's credit analyst Andrew Watt. "Many of the unfavorable ratings actions and outlook revisions can be directly attributed to merger and acquisition activity," said Mr. Watt. The report says that M&A activity is expected to be a major driver of 2006 ratings activity in the regulated U.S. utility and merchant power sectors, along with regulatory rulings and fuel cost recovery in a high-fuel-price environment. Companies with merchant exposure will continue to face the challenges of volatile cash flows and regulatory uncertainty this year, the report also states. The report is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit research and analysis system, at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Members of the media may request a copy of this report by contacting the media representative provided. |