Research Update: DPL Inc. And AES Ohio Ratings Placed On CreditWatch Negative On PUCO Staff Recommended Rate Freeze

Public Utilities Commission of Ohio (PUCO) staff recently revised its recommendation in Dayton Power&Light Co.'s (d/b/a AES Ohio) rate case, calling to freeze AES Ohio's rates. Previously, staff recommended a rate increase of about $65 million. We view this as potentially adverse for DPL Inc. and AES Ohio's credit quality, as it heightens regulatory risk and could likely weaken DPL's financial measures. As such, we placed all ratings on DPL and AES Ohio on CreditWatch with negative implications, including the 'BB+' issuer credit ratings. The CreditWatch negative placement incorporates the likelihood that we could lower our ratings on DPL and AES Ohio over the next 90 days by one or more notches should regulatory risk persist, the company's

...- Public Utilities Commission of Ohio (PUCO) staff recently revised its recommendation in Dayton Power & Light Co.'s (d/b/a AES Ohio) rate case, calling to freeze AES Ohio's rates. Previously, staff recommended a rate increase of about $65 million. - We view this as potentially adverse for DPL Inc. and AES Ohio's credit quality, as it heightens regulatory risk and could likely weaken DPL's financial measures. - As such, we placed all ratings on DPL and AES Ohio on CreditWatch with negative implications, including the '##+' issuer credit ratings. - The CreditWatch negative placement incorporates the likelihood that we could lower our ratings on DPL and AES Ohio over the next 90 days by one or more notches should regulatory risk persist, the company's financial measures remain below our downgrade threshold, or we reassess the likely degree of support from parent AES Corp....

Research Update