“We’re very committed to maintaining investment grade ratings, and will take whatever steps are necessary” to do so, an Aquila spokesman said Monday, following the announcement from Moody’s Investors Service Friday that the company and Aquila Merchant Services were being put on a negative outlook (see Daily GPI, April 29).

Ethan Hirsh, vice president of corporate communications, said that “given the current credit environment,” the company would be “taking a number of steps over the long term to maintain and improve its credit rating.” Aquila currently carries a Baa3 rating from Moody’s, the lowest investment grade.

Aquila’s common stock price dropped 23% Monday, losing $5.15 to close at $17.10.

Moody’s had said it would await the company’s earnings announcement Wednesday before commenting further. Aquila has given early guidance of a 50% first quarter year-to-year drop. Hirsh noted there were substantial market differences in the weather and volatility between this year and the comparison period a year earlier. Taking those differences, plus an accounting change, into consideration Aquila’s results are not that different from the trend in the rest of the industry. “We are still quite confident in the company’s strength overall.” Hirsh said executives would be addressing questions from the financial industry at its earnings conference Wednesday.

Moody’s had said it had concerns about declining earnings and reduced external credit available to Aquila Merchant Services, partially balanced by an increase in resources from Aquila Inc.

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