The anticipated full divestiture of Black Hills Corp.'s oil and gas business by mid-2018 is giving S&P Global Ratings a rosier view of the company and its Black Hills Power Inc. subsidiary.
S&P sees the potential for a ratings upgrade in the next 12 months in changing its outlook on the company to positive from stable. This potential upgrade is conditioned on the completion of the sale and of Black Hills continuing to have adjusted funds from operations to debt of 14% to 15%, even factoring in the federal tax reform impacts.
"We expect that post divestiture, Black Hills will have more predictable cash flows and reduced operational uncertainty," the rating agency said in a March 8 research note.
S&P affirmed the BBB corporate credit ratings of both companies.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.
