NEW YORK/BENGALARU, Aug 21 (Reuters) – Fitch on Monday downgraded Hawaiian Electric Industries’ (HE.N) credit rating to junk status, becoming the third ratings agency to flag risks associated with the utility’s potential exposure to liabilities related to the wildfire in Maui.
It cut the utility’s long-term issuer default rating to “B” from “BBB+” and put the stock on “Rating Watch Negative.”
“The rating action reflects potential exposure to large third-party wildfire-related liabilities if utility equipment is determined to have ignited recent wildfires in Maui,” Fitch said.
The cause of the fires is still being investigated. But the Honolulu-based company, Hawaii’s largest utility, has been blamed for them in class-action lawsuits claiming the utility failed to shut off power lines despite warnings that high winds might blow them down and spark wildfires.
The agency said potential liabilities could be above $3.8 billion, which represents an “existential threat” to the company. Hawaiian Electric shares ended the day 5.3% lower at $13.04.
The company’s spokesperson did not immediately respond to an emailed request for comment.
Last week, Moody’s and S&P Global downgraded the company to junk status. Hawaiian 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 114 lives.
Shares of Hawaiian have lost nearly 63% of their value since wildfire began on Aug. 8.
Reporting by Sourasis Bose in Bengaluru; Additional reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Arun Koyyur and David Gregorio
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