Fortis TCI Ltd.

The stable outlook reflects our view that FTCI's financial measures will stabilize and improve in 2021, which assumes gradual recovery from the pandemic. Specifically, we expect funds from operations (FFO) to debt in 2021 to reflect the 13%-14% range. We could downgrade FTCI over the next 12 months if its financial measures further deteriorate with an FFO-to-debt ratio that is consistently below 12%. This could happen if the pandemic persists and the tourism industry in Turks and Caicos does not recover as expected. We could also downgrade the company if business risk increases due to a weaker regulatory environment, or if the parent's group support for FTCI weakens. We could upgrade FTCI over the same period if its financial measures

...The company benefits from being part of the Fortis group. Fortis TCI Ltd. (FTCI) is a subsidiary of Fortis Inc., a large holding utility company. FTCI benefits from being part of the group, sharing best practices and management experience and expertise. FTCI also provides stable cash flow that aligns with Fortis' overall business strategy, and we expect support from the parent to persist. Thus, we consider FTCI to be moderately strategic to the Fortis group. This provides a one-notch uplift to FTCI's stand-alone credit profile (SACP). Exposure to weather and economic risks affect credit metrics, electricity consumption, and FTCI revenue. FTCI is in the Caribbean region, which is prone to hurricanes. This was evident in 2017, when hurricanes Irma and Marie hit the island. Extreme weather could stress credit metrics in the short term and make cash flow volatile. In addition, the company's main economic drivers are tourism and financial services, which account for half of the country's GDP....

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