S&P keeps LIPA's rating on watch negative
Sept 18 (Reuters) - Standard & Poor's Ratings Services on Wednesday said it is keeping the A-minus rating of Long Island Power Authority, New York, on CreditWatch with negative implications.
"The question of whether the utility possesses sufficient financial flexibility to address capital spending needs, additional debt, and inflationary pressures on wages and other costs outside the power cost adjustment, remains open," S&P said.
The ratings were placed on negative watch on July 2, 2013, after New York lawmakers passed legislation in June that authorizes the state to review LIPA's rate adjustments beginning in 2016. The state is requesting that the LIPA freeze rates through 2014 and possibly 2015.
The utility is expected to securitize portions of existing debt, and that could improve its finances, S&P said. But those details remain unresolved, leaving the credit rating agency still unable to assess the impact securitization would have on lender protections for the remaining debt that isn't securitized.
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