BBB Credit Rating in jeopardy...FitchRatings:
BBB' ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity.
Walking the tight rope after a few beers.
What happens when rates climb another 1%?
What happens if AQN loses its BBB credit rating?
Management forgot that normal cost to borrow is 6-8%.
What are the economics of the KY deal? Maybe earn 8% on power distribution.
Why would you acquire assets that might pay 8% if the cost to borrow nears 8%?
Credit Rating downgrade.
Tends to take place long after the problems arise.
There's your real risk here. A downgrade after borrowing costs climb.
KY Deal must be stopped before value of the company starts to recover.