Standard&Poor's Ratings Services today placed the ratings of Tucson Electric Power Co. (TEP; 'BB/--') on CreditWatch with negative implications following the announcement that TEP's parent, UniSource Energy Corp, (unrated) has agreed to sell 100% of the company to a private equity firm for about $3 billion, including the assumption of approximately $2.1 billion in debt. While the proposed sale will result in the retirement of roughly $260 million in obligations at TEP, overall the transaction is expected to add an estimated $400 million in additional debt to UniSource at the holding company level. UniSource is highly leveraged, with a debt-to-total capitalization ratio of more than 80% on a consolidated basis. Standard&Poor's prior stable outlook on TEP
