Standard & Poor’s Ratings Services Monday affirmed a “BBB-” corporate credit rating for South Dakota-based Black Hills Corp, dropping a “CreditWatch with negative implications” designation. However, for the firm’s overall outlook, S&P set a “negative” designation.

S&P said the Rapid City, SD-based energy holding company has about $740 million of debt outstanding and the current ratings reflect Black Hills’ “withdrawal” of its offer to acquire neighboring South Dakota-based NorthWestern Corp., which last week accepted a $2.2 billion offer from Australia-based Babcock & Brown Infrastructure.

Black Hills’ ratings reflect a consolidated credit profile, S&P said, along with its three subsidiaries — Black Hills Energy Inc., Black Hills Power Inc. and Cheyenne Light Fuel & Power Co. “The negative outlook reflects marginal credit measures for the rating given the company’s heightened level of business risk,” according to S&P credit analyst Paul Harvey.

“Of primary concern is the fact that management’s growth objective may contribute to the deterioration of Black Hills’ financial profile,” Harvey said.

In the wake of the NorthWestern sale to Babcock & Brown, Black Hills CEO David Emery issued a prepared statement that the company was disappointed that it did not win out in the bidding but is now concentrating on its existing and proposed coal-fired generation plants, along with developing existing oil/gas properties, including those recently acquired in the Piceance Basin of Colorado. NorthWestern had been “just one of many opportunities” Black Hills was pursuing, Emery said.

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