American Water Works Company, Inc.
) has solidified its existing liquidity position. The company has
raised the commitments under its revolving credit facility and
increased its commercial paper program. American Water Works has
received approvals from its subsidiary, American Water Capital
Corp., and its lenders.
AMER WATER WORK (AWK): Free Stock Analysis
CONN WATER SVC (CTWS): Free Stock Analysis
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Per the plan, American Water Works' commitments under the
revolving credit facility and commercial paper program will be
increasing to $1.25 billion from $1 billion and to $1 billion
from $700 million, respectively. Under the revolving credit
facility, the termination date for $1 billion has been extended
to Oct 2018 from the original date of Oct 2017. Other terms and
conditions of the revolving credit facility will remain
American Water Works intends to utilize the increase in
commitments under its revolving credit facility and enhance its
commercial paper program for general corporate purposes.
In Oct 2012, American Water Works entered into a new revolving
credit agreement worth $1 billion in aggregate total commitments,
while replacing the existing revolving credit facility of $685
million. The company increased the funding limit for general
corporate financing activities.
American Water Works is currently following steady inorganic
growth strategy to expand its footprint, while improving the
existing operations. In 2013, the company has already completed
several acquisitions and invested substantial amounts for its
Recently, American Water Works' subsidiary Missouri American
Water acquired Tri-States Utility, Inc. On the organic growth
front, the company's another unit Pennsylvania American Water
announced to invest $0.6 million for water main replacement in
the Borough of Bridgeport.
In May 2013, the credit rating companies - Moody's Investors
Service and Standard & Poor's - upgraded their corporate
credit rating on American Water to 'Baa1' from 'Baa2', and to
'A-' from 'BBB+', respectively. 'Baa1' considers a medium grade
and it possess certain speculative characteristics, while 'A-'
implies strong ability to meet financial commitments. A strong
credit rating will help American Water Works to accumulate funds
from the lenders with lower interest rate.
We believe that American Water Works' continuous effort towards
addition of new assets and improvement of the existing
operations, backed by funding support from the financial
institutions, will enable the company to provide uninterrupted
utility services to its customers while strengthening system
American Water Works currently has a Zacks Rank # 3 (Hold).
However, other water utilities that are worth considering include
) with a Zacks Rank #1 (Strong Buy), and
Water Co. Ltd.
), each with a Zacks Rank #2 (Buy).
Voorhees, N.J.-based American Water Works was founded in 1886.
The company serves around 14 million people with water and