NEW YORK - (Business Wire) Fitch Ratings has affirmed the credit ratings of Washington Gas Light Co. (WG) and WGL Holdings, Inc. (WGL) as follows:
Washington Gas Light Co. (WG)
--Long-term Issuer Default Rating (IDR) at 'A+';
--Senior unsecured notes at 'AA-';
--Preferred stock at 'A+';
--Short-term IDR at 'F1+';
--Commercial paper at 'F1+'.
WGL Holdings, Inc. (WGL)
--Long-term IDR at 'A+';
--Senior unsecured debt (indicative) at 'A+';
--Short-term IDR at 'F1';
--Commercial paper at 'F1'.
The Rating Outlook for both companies is Stable. Approximately $700 million of debt is affected.
WGL's ratings and Stable Outlook reflect the strong and predictable nature of the cash flows at WG, its regulated gas distribution subsidiary, and credit metrics in line with the ratings category. While WGL is involved in non-regulated activities, the substantial majority of its assets and cash flow are associated with its regulated utility. WG has been able to recover its natural gas costs on a timely and consistent basis via adjustment mechanisms (PGAs) in each of WG's jurisdictions. In addition, the company continues to maintain strong credit ratios through increasingly efficient operations and constructive rate mechanisms in its operating jurisdictions.
WG's rate strategy has been to reduce revenue volatility by pursuing weather and conservation normalization adjustments. The company currently has revenue normalization in place in Maryland and weather normalization in Virginia and is actively pursuing similar measures in D.C. These rate mechanisms help to mitigate some of the company's inherent sensitivity to weather and help stabilize cash flows.
Additional credit considerations include higher business risk associated with subsidiary WGEServices' (WGES) moderately expanding non-regulated retail electric and gas marketing operations. However, the scale of WGES' operations is expected to remain relatively modest over the next several years.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings, New York
Peter Molica, +1-212-908-0288
Ralph Pellecchia, +1-212-908-0586
Cindy Stoller, +1-212-908-0526 (Media Relations)
