The ratings affirmation on UtiliCorp United Inc. (BBB/Stable/A-2) and its affiliates follows the firm's announced deal to purchase Midlands Electricity PLC with a financial partner for about $2.1 billion. UtiliCorp and its partner plan to keep the existing $1.7 billion of debt in the Midlands entity, with the remaining $360 million representing the partners' equity stake. The affirmation of the UtiliCorp ratings is based on Standard&Poor's conclusion that the company will offer minimal support to Midlands and its debt holders, and therefore, the transaction will have little effect on UtiliCorp's debt-servicing capabilities. That conclusion rests on the fact that the debt is legally nonrecourse to UtiliCorp, and the company's track record with similar utility investments in other countries.
