Standard & Poor’s Ratings Services lowered its outlook for New Haven utility company UIL Holdings Corp., citing the company’s proposed buyout of three Iberdrola USA units.
On Tuesday, UIL said it will buy three natural gas companies from Iberdrola USA, the subsidiary of Spanish energy company Iberdrola, for $885 million. The companies include Southern Connecticut Gas Co., Connecticut Natural Gas Corp. and the Berkshire Gas Co.
S&P lowered its outlook for UIL to negative from stable, citing concerns that the company can successfully finance the deal.
“The negative outlook on UIL reflects the potential for a lower rating on the consolidated entity if it doesn’t fund the proposed acquisition of the natural gas distribution companies in a balanced manner that at least preserves the consolidated aggressive financial risk profile,” S&P said in a statement.
