The 'BB' corporate credit rating on Tucson Electric Power Co. (TEP) reflects a weak overall financial profile that is principally the result of high debt levels. The rating also reflects a business profile score of '6' on Standard&Poor's Ratings Services' 10-point scale, where '1' is the strongest. TEP is on CreditWatch with negative implications, reflecting uncertainties related to the pending acquisition of TEP's parent, UniSource Energy Corp., by a consortium led by Kohlberg Kravis Roberts&Co. (KKR) for $3 billion, including the assumption of about $1.9 billion of debt and capital lease obligations. While the transaction would result in a debt reduction of $260 million at TEP, it would also result in a net increase of $400
