(Tiper Stock Exchange) – Fitch Ratings downgraded the Long-Term Issuer Default Rating (IDR) by Hawaiian Electric Industries (HEI) to “B” from “BBB+” and Hawaiian Electric Company (HECO) long-term IDR to “B” from “A-“.
The downgrade reflects the potential exposure to large bushfire liabilities, if the utility’s equipment is determined to have triggered recent fires in Maui and the utility is held liable for such claims under applicable negligence standards. Fitch believes access to capital in HECO and its subsidiaries at a reasonable cost is “uncertain” given the scale of potential liabilities associated with the fires.
Confirmed deaths resulting from the ongoing disaster exceed 100 and more than 2,200 structures have reportedly been destroyed. Fitch believes that the potential utility liabilities could approach $3.8 billionposing “an existential threat to the business”, barring substantial regulatory/legislative support.
Fitch’s downgrade to junk level follow similar moves by Moody’s And S&P Global last week.