Rating Action
Moody's Investors Service upgraded CenterPoint Energy Resources Corp. (CERC) to an A2 senior unsecured rating, up from A3, and shifted its outlook from negative to stable. In the same review, Moody's affirmed CenterPoint Energy, Inc. (CNP) at its Baa2 senior unsecured rating and Prime‑2 short‑term rating for commercial paper, and affirmed Houston Electric, LLC at a Baa1 senior unsecured rating.
Financial Metrics
For the twelve months ended June 30 2026, CERC’s cash flow from operations before changes in working capital to debt, adjusted for securitisation debt, increased to 13.2%, up from 12.3% at the end of 2025. This marks the first time the metric has exceeded the 13% level since Hurricane Beryl in July 2024. Houston Electric’s comparable cash‑flow‑to‑debt ratio rose to 15.1% over the same period, up from 12.7% at year‑end 2025.
Investment and Capital Programs
CenterPoint Energy, Inc. disclosed a capital‑expenditure plan of $34.2 billion for the 2026‑2030 period. Houston Electric highlighted a $21.6 billion capital program for the same horizon and noted that its cost‑recovery mechanisms allow it to recover 98% of capital costs, mitigating cash‑flow lag.
Ohio Gas LDC Sale
On 21 October 2025, CenterPoint announced the sale of its Ohio Gas Local Distribution Company (LDC) with expected net proceeds of $2.4 billion. The transaction is anticipated to close in the fourth quarter of 2026, after which the proceeds will be used to proportionately reduce debt in the capital structure.
Hurricane Beryl Cost Securitisation
Houston Electric completed a securitisation of costs related to Hurricane Beryl in the first quarter of 2026, further strengthening its balance sheet.
Implications
The rating upgrade reflects a credit profile consistent with an A2 rating and removes the previous constraint on CERC imposed by CNP’s rating. The expected debt reduction following the Ohio Gas LDC sale is projected to improve leverage metrics shortly after the transaction’s completion.