RE:RE:RE:Ouch 🤕 swingtradeeeeee wrote: There will be over 3 billion in floating rate debt after the Kentucky purchase.
They will also increase their net revenues when the Kentucky purchase closes which should cover most of the extra interest charges from the acquisition. At current rates, I expect the net effect of the extra debt and extra revenues from the acquisition to be about neutral on a yearly basis, but that varies quarterly due to the seasonality of revenues.
From my calculations, If rates increase by another 2% (200 basis points), then the after tax net effect on the earnings of the increased debt level would be somewhere between minus 2 and 4 cents per share annually in the short/mid term. Longer term, if the higher rate environment persists, this would eventually be compensated by higher return rates from utilities (ie: instead of having a 9-10% return on the rate base, they'd have a 11-12% return).
That doesn't evenconsider the capital recycling on non-utilities investments they are doing and the new projects coming online in Q1 2023 generating extra net revenues.