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S&P revises SCANA to CreditWatch positive, anticipating Dominion merger close

S&P Global Ratings has placed SCANA Corp. and its subsidiaries on CreditWatch with positive implications, based on the anticipated close of its $14.7 billion acquisition by Dominion Energy Inc. following approval of the deal in South Carolina.

The Public Service Commission of South Carolina on Dec. 14 conditionally ruled in favor of the merger, which was announced in January. The commission also ordered a rate reduction of $370 million, or 15%, for South Carolina Electric & Gas Co., which is roughly the same level of rate reduction as the temporary rate cut adopted by the state legislature in June related to the abandonment of the V.C. Summer nuclear expansion project.

"Once it becomes part of Dominion, we expect to raise the issuer credit ratings on SCANA and its subsidiaries to be more closely aligned with the 'BBB+' issuer rating on Dominion," an S&P Global Ratings analyst wrote in a Dec. 18 research update.

S&P Global Ratings has SCANA's issuer credit rating at BBB- and short-term rating at A-3.

SCANA, South Carolina Electric & Gas and Public Service Co. of North Carolina Inc. have been on CreditWatch negative since September 2017, S&P Global Ratings said.

The original S&P Global Ratings documents referred to in this news brief can be found here.