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Moody's downgrades El Paso Electric

Moody's lowered El Paso Electric Co.'s issuer and senior unsecured ratings to Baa2 from Baa1, concluding a review initiated on July 1. The rating outlook is stable.

"We expect El Paso Electric's credit metrics to be sustained at lower levels going forward, with a ratio of cash flow from operations before working capital changes (CFO pre-WC) to debt of around 16%, more in line with slightly lower rated vertically integrated utility peers," the rating agency said in a Sept. 17 research note.

Additionally, Moody's cited high, partly debt-funded capital expenditures and cash flow pressure from tax reform as drivers for lower metrics. It also considered the utility's pending acquisition by Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Investment Management Inc., in its assessment.