Research Update: DPL Inc., Subsidiary Outlooks Revised To Stable From Developing On Regulatory Order; Ratings Affirmed

The Public Utilities Commission of Ohio (PUCO) issued an order approving Dayton Power&Light Co.'s (d/b/a AES Ohio) settlement agreement to modernize its distribution grid. The PUCO also concluded that AES Ohio passed the significantly excess earnings test (SEET) for 2018, 2019, and its current rate plan. Following this order, parent DPL Inc. announced it expects ultimate parent AES Corp. to inject about $150 million of equity capital into the company, consistent with AES' prior statement of intent. We view the financial conditions of DPL and AES Ohio as stabilized and revised our outlooks on both companies to stable from developing. We affirmed all ratings. The stable outlooks reflect our expectation that DPL will manage regulatory risk effectively throughout

...- The Public Utilities Commission of Ohio (PUCO) issued an order approving Dayton Power & Light Co.'s (d/b/a AES Ohio) settlement agreement to modernize its distribution grid. The PUCO also concluded that AES Ohio passed the significantly excess earnings test (SEET) for 2018, 2019, and its current rate plan. - Following this order, parent DPL Inc. announced it expects ultimate parent AES Corp. to inject about $150 million of equity capital into the company, consistent with AES' prior statement of intent. - We view the financial conditions of DPL and AES Ohio as stabilized and revised our outlooks on both companies to stable from developing. We affirmed all ratings. - The stable outlooks reflect our expectation that DPL will manage regulatory risk effectively throughout our base-case forecast over the next 12 months. We expect financial measures to be weak for the rating in 2021 but meaningful improvement in 2022, reflecting timely recovery of smart grid investments. As such, we expect that...

Research Update