Tucson Electric Power Co.'s ultimate parent Fortis Inc. announced its planned acquisition of utility holding company ITC Holdings Corp. and on Feb. 9, 2016, we revised the outlook on Fortis to negative from stable. We maintain our view of Tucson Electric as a moderately strategic subsidiary of Fortis. We are affirming the ratings on Tucson Electric, including the 'BBB+' issuer credit rating and 'BBB+' senior unsecured debt rating, and revising the outlook to negative from stable. The negative outlook reflects the possibility that we could downgrade Fortis by up to one notch on its ITC acquisition. This reflects execution and integration risks, as well as the probability that consolidated financial measures could weaken because of increased consolidated debt from the
