S&P Global Ratings revised its outlook on Emera Inc. and subsidiaries Nova Scotia Power Inc. and TECO Energy Inc. to "stable" from "negative" and affirmed their long-term corporate credit ratings at "BBB+."
Despite experiencing "headwind in its financial performance in the short term," Emera continues to expand its focus on low-risk and stable businesses that include transmission and distribution services.
"We forecast that funds from operations-to-debt will be about 12% in 2018, and rise to about 14% by 2020," S&P Global Ratings said. "The company has largely completed the Teco integration and anticipates that the Maritime Link project will be completed in 2018 on time and on budget." The Maritime Link is a mostly underwater transmission line connecting the island of Newfoundland and Nova Scotia, and will allow Nova Scotia Power to import electricity from the province of Newfoundland and Labrador.
The rating agency expects that 50% of the cash flow will come from Emera's Florida-based utilities and will be supportive of the company's financial performance in the long term besides equity issuance and noncore asset sales to offset low cash-flow problems. Florida has a very credit-supportive regulatory environment, S&P Global Ratings said.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.