Moody's Investors Service lowered NiSource Inc.'s senior unsecured rating from Baa1 to Baa3 and subsidiary rating to Baa2, affecting roughly $8 billion of debt securities.
The downgrade cites a year‑end 2001 adjusted debt‑to‑capital ratio of about 70% and retained cash‑flow‑to‑adjusted‑debt below 3%, indicating higher leverage and weak cash generation.
NiSource's market capitalization (~$4 billion) is half its debt load; the company intends to keep its dividend unchanged and plans to sell Indianapolis Water Company for $300 million in spring to aid debt reduction.
Cash flows from subsidiaries (NIPSCO, Columbia, Bay State) are insufficient for debt service and dividends; liquidity is constrained but supported by banks and an unused $2.5 billion facility.
The Indiana Utility Regulatory Commission is reviewing NIPSCO's retail electric rates amid a weak regional steel‑driven economy, adding execution risk to NiSource's leverage‑reduction plan over the next 12‑18 months.
