Moody’s Cuts Ratings on Japanese Utilities, Tokyo Gas
Chubu Electric Power Co., Kansai Electric Power Co., Kyushu Electric Power Co. and five other Japanese power companies had their credit ratings cut by Moody’s Investors Services, which cited a “less supportive” regulatory framework following the Fukushima nuclear disaster.
Utilities that generate nuclear power had their ratings but by two notches, while the rankings of others were lowered by one level, Moody’s said in a statement.
“The two-notch downgrades of those electric utilities with nuclear-generation capabilities considers the additional and more immediate risks facing these companies following the events at Fukushima Daiichi, including their significantly higher expenses for LNG (Liquefied Natural Gas) and other fossil fuels,” Moody’s said. “It also reflects the resulting economic, financial, and political conditions that may make it more difficult for these companies to continue recovering their higher costs on a timely basis.”
Tokyo Electric Power Co., operator of the crippled Fukushima station, had its long-term credit rating cut four steps to junk status by Moody’s on June 20 as costs to cover the meltdowns at the nuclear plant rose.
Tokyo Gas Co. had its senior unsecured debt rating cut by one notch to Aa2. The ratings of all the companies were kept on review for downgrade.
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