DBRS Confirms Liberty Utilities at BBB (high) Stable

DBRS has confirmed the ratings of BBB (high) with Stable trends related to Liberty Utilities Finance GP 1, a wholly owned financing subsidiary of and guaranteed issuer for Liberty Utilities Co. (LU or the Company). The ratings are based on the credit quality of Liberty Utilities Co., which reflects the strength of LU’s diversified portfolio of regulated utilities operations in various jurisdictions and stable cash flows from regulated operations.

LU’s utilities subsidiaries operate in stable and transparent regulatory frameworks with relatively supportive regulatory regimes. Furthermore, each of LU’s subsidiaries has continued to invest in its business and assets with consistent capital expenditure programs. These investments, with regulatory approvals, maintain the rate base and asset quality to ensure a solid track record of service quality and reliability. Despite the number of significant acquisitions, LU’s credit metrics have improved due to its conservative financing strategy. DBRS expects LU to use the same strategy going forward to maintain a consolidated debt-to-capital ratio, at around 50%.

While the projected financial metrics are more aligned with a higher A-rated utility, the company is undergoing rapid growth. Integration of the new business and realization of the expected rate case outcomes remain unproved. Improvements in forecast metrics are dependent upon successful rate cases.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The Series A Senior Notes are guaranteed by Liberty Utilities Co.

The applicable methodology is Rating Companies in the North American Energy Utilities (Electric and Natural Gas) Industry, which can be found on our website under Methodologies.