S&P downgrades Hawaiian Electric to ‘B-’ as wildfires raise market-access worries

The S&P Global Ratings on Thursday downgraded Hawaiian Electric Industries and all of its rated subsidiaries to ‘B-’ from ‘BB-’, citing the company’s likely inconsistent access to the capital markets in the aftermath of the recent Maui wildfires.

“Given the essential nature of the services provided by HEI, we believe that having consistent access to the capital markets is fundamental for the long-term success of its operations,” S&P said in a note.

S&P said it views the Honolulu-based company’s engagement with financial advisors related to scenario planning as indication of the potential for adverse developments regarding its debt service capacity in the future.

The rating agency expects that the economic and potential non-economic damages may exceed the US Federal Emergency Management Agency’s initial $5.5 billion damage assessment.

“As the fatalities continue to rise, pressure is likely to increase on all stakeholders, including HEI,” it said.

The ratings of the company - Hawaii’s largest utility - remain on CreditWatch, where they were placed with negative implications on Aug. 15 after S&P put the company at “BB-”. Moody’s and Fitch also downgraded Hawaiian Electric to junk status earlier this month.

The company had said it was not looking to restructure but was seeking expert advice amid investor worries over its role in the Maui wildfires that have claimed at least 115 lives.