2 Utilities That Can Weather Storm Season and Beyohttps://www.minyanville.com/businessmarkets/articles/utilities-electric-companies-gas-companies-water/9/2/2011/id/36698?page=2
Atlantic Power Corp (
AT) had perhaps the most positive news. The company is in the process of purchasing privately held Capital Power Partners LP in a deal that would roughly double its size.
The key question mark about the acquisition has been when regulatory approvals will be obtained, at which time Atlantic would have to finance the deal. That’s seemed a somewhat risky proposition in recent weeks, as European sovereign debt woes have festered and Standard & Poor’s cut the US government’s credit rating below AAA for the first time in 70 years.
If Atlantic management has done one thing to perfection over the years, however, it’s been to anticipate where its primary risk lies and to prepare against it. This time around is the exception, as management has now obtained funding that allows it considerable flexibility for permanent financing.
Should credit tighten up, the company will be able to wait it out until conditions improve. And should conditions remain as favorable as they are now, it will lock in low-cost financing much sooner. Atlantic Power is still a buy for those who don’t already own it.