PGW EARNS POSITIVE OUTLOOK FROM FITCH RATINGS
Posted on:Apr 23, 2020Fitch affirms PGW’s bond rating at BBB+, while Moody’s says PGW’s outlook is “stable”
Philadelphia Gas Works’ (PGW) bond rating outlook by Fitch Ratings has improved to “positive” from “stable.” Fitch also affirmed PGW’s bond rating at BBB+.
Fitch noted that PGW’s “strong operating risk profile assessment is based on PGW's well-identified cost drivers (including labor costs and contracted purchases for natural gas supply), an ability to manage costs with shifts in demand, and manageable capital pressures.” The analysis also stated that “Fitch assesses PGW's financial profile to also be strong reflecting historically stable financial results that have improved over the past two years, leading to a lower leverage ratio of 5.1x in 2019.”
In addition, PGW’s bond rating from Moody’s Investors Services was affirmed at A3 with a stable outlook. In its ratings rationale, Moody’s noted that PGW has “sound management that has enhanced PGW's operating efficiencies and resulted in recurring cost savings that have led to a more stable and more predictable financial position that is expected to be maintained.”
“PGW’s positive bond outlook from Fitch and Moody’s rating affirmation reflects our longstanding efforts to manage costs and provide safe, reliable, and affordable gas service for residents and businesses in the City,” said Craig White, President and CEO of PGW. “Our focus is to continue to operate safely and efficiently while investing in new infrastructure that ensures service reliability for years to come.”
In recent years, PGW has implemented a number of initiatives that reduced costs, increased efficiency and explored new income streams. Among these initiatives are PGW’s Long Term Infrastructure Improvement Program (LTIIP) for service reliability, and a proposed public-private partnership with Passyunk Energy Center LLC to market and sell liquefied natural gas, which has the potential to be a new revenue source. The project also proposes installing solar panels to help lower energy costs and reduce the net emissions of the new liquefier.
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