...S&P Global Ratings today placed its '##' long-term senior-lien rating, '##-' junior-lien rating, and 'A-1+' short-term rating on San Antonio, Texas' electric and gas systems, on CreditWatch with negative implications. The City Public Service Board of San Antonio (or CPS Energy) manages and operates the city's electric and gas systems. The CreditWatch placement follows last week's extreme winter weather across Texas and reflects the magnitude of the utility's revised estimates of the costs of procuring electricity and natural gas during the week of Feb. 14 that will add to its debt burden, pressure its rate-making flexibility, and potentially weaken its financial performance. We understand management has a plan to use its internal liquidity and commercial paper (CP) to meet these payment obligations in the near term and will likely issue long-term debt and spread out these costs over many years. However, it is unclear as to the magnitude and timing of potential rate increases that must be...
