Hawaiian Electric’s Muni Debt at Risk of Being Downgraded to Junk
Hawaiian Electric Industries Inc.’s municipal debt may be downgraded to junk status, according to Barclays Plc. The downgrade could be a result of the company’s high debt levels and weak earnings.
Hawaiian Electric’s Financial Struggles
Hawaiian Electric Industries Inc. is the largest provider of electricity in the state of Hawaii. The company has been struggling financially in recent years due to its high debt levels and weak earnings. The company’s debt-to-equity ratio is currently at 1.6, which is higher than the industry average of 1.2.
The company’s earnings have also been weak. In the first quarter of 2023, Hawaiian Electric reported a net loss of $25 million. This was a significant decrease from the previous year’s net income of $45 million.
Barclays’ Downgrade Prediction
Barclays Plc has predicted that Hawaiian Electric’s municipal debt may be downgraded to junk status. The downgrade would be a result of the company’s high debt levels and weak earnings.
Barclays analyst Michael Koppel said that the downgrade could happen as soon as the fourth quarter of 2023. He also noted that the downgrade could be a result of the company’s high debt levels and weak earnings.
Hawaiian Electric’s Response
Hawaiian Electric has responded to Barclays’ downgrade prediction by saying that it is taking steps to improve its financial situation. The company has said that it is working to reduce its debt levels and improve its earnings.
The company has also said that it is taking steps to improve its customer service and reduce its operating costs. Hawaiian Electric has said that it is committed to providing reliable and affordable electricity to its customers.
Impact of Downgrade
If Hawaiian Electric’s municipal debt is downgraded to junk status, it could have a significant impact on the company’s finances. A downgrade could lead to higher borrowing costs and a decrease in the company’s access to capital.
It could also lead to a decrease in the company’s stock price and a decrease in investor confidence. A downgrade could also lead to a decrease in the company’s credit rating, which could make it more difficult for the company to borrow money in the future.
Conclusion
Hawaiian Electric Industries Inc.’s municipal debt may be downgraded to junk status, according to Barclays Plc. The downgrade could be a result of the company’s high debt levels and weak earnings. If the downgrade happens, it could have a significant impact on the company’s finances. Hawaiian Electric has said that it is taking steps to improve its financial situation and reduce its debt levels.