Yankee Gas bond issue priced; company says Moody’s downgrade reflects regulatory risk for CL&P, not immediate Yankee action

Company witnesses told the Public Utilities Regulatory Authority that Yankee Gas completed pricing for an expected $185 million first‑mortgage bond transaction and that the company will update the record with final terms and issuance expenses once the deal closes.

Why it matters: Cost of debt affects revenue requirement and the overall cost of capital used in ratemaking. Witnesses also discussed a recent Moody’s downgrade of Connecticut Light & Power (CL&P) to Baa1 and explained how rating agencies view regulatory risk in Connecticut.

Mike Desilio, the company’s corporate finance witness, said the company priced $185 million in two tranches: $148 million at 5.02% maturing in 2031, and $37 million at 5.55% maturing in 2035, with an expected closing and funding date of July 15, 2025. Desilio said those term and rate outcomes were lower than earlier company projections, mainly because the company issued shorter maturities than previously modeled. He said the company will file the issuance details and actual expenses to the record on or about Aug. 1, 2025.

Jonathan Callan reviewed Moody’s recent analysis and noted Moody’s explicit language that the downgrade of CL&P primarily reflects concerns about Connecticut’s regulatory environment — Moody’s wrote that the state currently represents "the least credit supportive utility regulatory environment in the U.S." Callan added that Moody’s and other agencies monitor revenue requirement outcomes, allowed ROE, capital structure and cash flows, and often wait for a final rate decision before taking agency action; Moody’s action on CL&P, he said, reflects concern in that case about storm cost balances and recovery timing.

Ending: The company will submit a final issuance report after the transaction closes; parties and the authority will consider the issuance and any rating‑related evidence in the pending rate case record.