Fitch assigns BBB+ rating to Xcel Energy's notes

AP News
Posted: Sep 08, 2011 4:42 PM
Fitch assigns BBB+ rating to Xcel Energy's notes

Fitch Ratings said Thursday that it assigned a BBB+ rating to utility Xcel Energy Inc.'s issue of $250 million in notes.

The 4.80 percent senior unsecured notes are due Sept. 15, 2041. Fitch said the rating outlook for Xcel is "Stable."

Xcel, based in Minneapolis, will use proceeds from the sale to repay short-term borrowings and for general corporate purposes, Fitch said. The notes will rank on parity in right of payment with all existing and future unsecured debt.

The agency said it based the ratings on "strong underlying cash flows" from four Xcel regulated subsidiaries that have solid credit profiles, conservative capital structure and financing plans and regulatory environments that are generally constructive.

Fitch said the rating assumes reasonable outcomes in pending rate cases in Colorado, Minnesota and Wisconsin in the second half of 2011, and pending cases in North Dakota and South Dakota in the first quarter of 2012.

Fitch said it is concerned about a pending rate case in New Mexico involving Southwestern Public Service Co. where the agency said allowed returns have been historically below industry averages. Another concern is Xcel's capital expenditure program of approximately $2.6 billion per year through 2015.

However, the capital expenditures are partially offset by Xcel's liquidity, which Fitch said is sufficient to fulfill short-term funding requirements.

Shares of Xcel fell 9 cents to close at $24.24. In the past 52 weeks, the price has ranged from $21.20 to $25.39 a share.