Algonquin Power & Utilities Corp T.AQN.PR.A

BBB Credit Rating in jeopardy...

[malx1]

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.

[starboy101]

I raised this issue awhile back in one of my previous posts, that there was a serious risk of seeing this POS's credit rating downgraded. A downgrading below BBB would mean  they or any company would no longer considered investment grade. And consequently many pension funds and institutions would not be able to hold their bonds. If a downgrading were to occur which I believe is a

[malx1]

Agree. Cost to borrow and to carry debt continues to rise.     Names like AQN at risk. So I see the future valuation here in the hands of Federal Reserve and BOC.      If execs push forward with KY deal, then this vessel really starts to take on water. Too scary for what is supposed to be a boring utility.     People may find less volatility in