Hawaiian Electric Co.’s credit score was lowered into junk territory by Moody’s Investors Service, cementing the embattled utility’s status as a so-called fallen angel after fires spread across Maui.
The company’s debt rating was downgraded to Ba3, three steps into junk, from Baa1 on Friday. Its parent company, Hawaiian Electric Industries Inc., was assigned a B1 grade. Moody’s cited the “heightened uncertainty” around the company and its liabilities if it is found at fault for the fires. The company’s debt remains on review for further ratings cuts.
The company said in a regulatory filing Friday that its goal is not restructuring, but to “endure as a financially strong utility,” sending shares surging as much as 26% in pre-market trading. The Moody’s cut is the utility’s second major downgrade into junk, which pushes the its securities into high-yield credit indexes. The move comes in the wake of a major fire in Maui, which has become the deadliest in the US in more than a century. While no official cause has been determined, attention is already focusing on whether power lines owned by Hawaiian Electric played a role.
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