Research Update: Caribbean Utilities Co. Ltd. Downgraded To 'A-' From 'A' On Increased Business Risks; Outlook Stable Sep 11
Standard & Poors, September 2011
Abstract
We have lowered our long-term corporate credit and senior unsecured debt ratings on Caribbean Utilities Co. Ltd. (CUC) to 'A-' from 'A'. The downgrade reflects our opinion of a weak customer market in its service territory, which has weakened the company's business risk profile as the Cayman Islands economy contracted about 10.8% (real GDP in 2007 prices) in 2009 and 2010, and end-of-year population contracted 4.7%. Business risks are also increasing due to higher fuel costs, which are driving material growth in prices to customers amid declining real GDP per capita. All of these factors have resulted in a small decline in sales volumes through which the company recovers its costs and earns a return. While not new, the comparatively...
Companies mentioned in this report are: Caribbean Utilities Co. Ltd.,Fortis Inc.
Action: Downgraded
Action: Outlook: Stable
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.
Caribbean Utilities Co. Ltd.,Fortis Inc.
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