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S&P revises outlook on OGE Energy, Oklahoma Gas and Electric

S&P Global Ratings on March 5 revised its ratings outlooks on OGE Energy Corp. and Oklahoma Gas and Electric Co. to negative from stable on weaker financial measures.

Both companies have corporate credit ratings of A- from S&P Global Ratings. These ratings were affirmed along with OGE Energy's A-2 commercial paper and Oklahoma Gas and Electric's A- senior secured and A-2 commercial paper ratings.

"The outlook revision reflects the company's revised capital spending plan and the effects of U.S. corporate tax reform that we expect will weaken the company's financial measures going forward, resulting in minimal cushion for the current rating level," S&P Global Ratings said in a research note.

OGE projects capital expenditures of $625 million in 2018, including $420 million for transmission, distribution and generation. The remaining $205 million is for company projects such as the scrubbers and the natural gas conversion.

The outlook revision also considers the uncertainty on the management of the regulatory risk in Oklahoma, which could challenge the company's ability to maintain its funds from operations to debt above the downgrade trigger of 23%.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.