S&P Global Ratings has upgraded issuer credit ratings on DPL Inc. and its subsidiary Dayton Power and Light Co. to 'BB' from 'BB-' and placed them on CreditWatch, with positive implications. The decision comes in light of DPL's recent decision to sell 973 MW of capacity in its merchant generation business. The sale will help the company achieve its goal of transforming into a stable and low-risk transmission and distribution business.
"A completed sale could support a stronger business risk profile assessment," the rating agency said. "We revised our comparable rating analysis modifier to neutral from negative, reflecting our expectations of improvements to DPL's business risk that mitigates the company's relatively weak financial measures, including funds from operations, FFO, to debt of about 9.6%, or the lower end of the range for its financial risk profile category."
DPL recently entered an agreement to sell its remaining gas-fired generation assets to Kimura Power LLC for $241 million in cash.
Additionally, S&P raised the ratings on DPL's senior unsecured debt to 'BB' from 'BB-' and on DP&L's senior secured debt to 'BBB' from 'BBB-' and placed the ratings on CreditWatch, with positive implications.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.