AIC's ratings upgrade reflects:
--Increased regulatory predictability
--Robust financial performance
--Elevated but manageable capex
--Ample access to liquidity
KEY RATING DRIVERS
AIC's ratings upgrade is supported by the implementation in
AIC's ratings are supported by the company's sustained solid financial performance that is consistent with the current ratings. Fitch forecasts the ratios of Adjusted Debt/EBITDAR, FFO-lease adjusted leverage, and FFO fixed charge coverage, to average 3.1x, 3.4x, and 4.5x, respectively, over 2014 - 2016. Fitch's projections assume that AIC receives timely and adequate recovery of planned capital investments in the context of annual FRP proceedings.
AIC plans on spending a total of approximately
AIC also plans on spending incremental amounts in its gas business. Fitch expects AIC to recover gas investments via an infrastructure rider. Projected capex also includes approximately
Fitch expects AIC to finance capex in a conservative manner, using a balanced mix of internally generated funds and long-term debt issuances.
Fitch considers liquidity to be strong. AIC has access to a total of
Factors that could lead to a positive rating action: Adjusted debt/EBITDAR below 3.5x and FFO lease-adjusted leverage below 4x on a sustained basis could lead to positive rating actions.
Factors that could lead to a negative rating action: Inability to timely recover via FRP and FERC proceedings a sizeable
Additional information is available at 'www.fitchratings.com'.
--'Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage' (
--'Rating U.S. Utilities, Power and Gas Companies' (
Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage
Rating U.S. Utilities, Power and Gas Companies (Sector Credit Factors)
Source: Fitch Ratings
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