On Aug. 19, 2004, Standard&Poor's Ratings Services assigned its 'B-' rating to Aquila Inc.'s (B-/Negative/--) $300 million premium income equity securities (PIES) offering. The PIES carry a coupon of 6.75% and represent mandatory convertible senior notes, which will convert into common stock no later than Sept. 15, 2007. Net proceeds will be used toward reducing liabilities and improving the company's weak financial profile. The outlook is negative. Kansas City, Mo.-based energy provider Aquila has about $2.8 billion of debt. The ratings on Aquila reflect the company's marginal credit measures and insufficient cash flow from operations to offset a burdensome debt level, not quite mitigated by management's efforts to refocus on its traditional utility business. Due to weak cash
