Credit rating agency Moody's Investor Services has downgraded its financial outlook for the private energy firm UIL Holdings, hot on the heels of Mayor Michael Nutter's announcement that UIL was interested in buying the city's debt-ridden public utility, the Philadelphia Gas Works.
Ironically, the change was dictated by the assumption that UIL would successfully complete the $1.86 billion purchase PGW.
Moody's announced in a press release on Tuesday it was downgrading UIL's financial outlook from "stable" to "negative," following "expectation that UIL will close on its announced acquisition of [PGW]," which would massively increase the company's debt load. If the energy company closed on PGW, Moody's predicts the company "will materially increase the level of holding company debt to roughly 30% of total consolidated debt." According to Moody's, the future for the company post-takeover was not a bright one.