Hawaiian Electric Stock Slides Deeper After Another Ratings Cut

Shares of Hawaiian Electric plunged more than 18% on Friday as the utility's financial and legal liabilities continue to mount following the deadly Aug. 8 fire on the island of Maui.

S&P Global Ratings further slashed its credit rating on the utility on Friday, exacerbating its decline. S&P cut Hawaiian Electric debt to ‘B-’ from ‘BB-,' or deeper into junk bond territory. Moody’s and Fitch have also lowered Hawaiian Electric to junk bond status.

Much of the decline on Friday followed an announcement Thursday that the company was eliminating its dividend and tapping its revolving credit lines for $370 million to bolster its cash position. The S&P report said Hawaiian Electric faces “likely inconsistent access” to capital markets.

On Thursday, Maui County filed a lawsuit blaming the county for the fire, which took at least 115 lives and caused an estimated $5 billion to $6 billion in damages. The company said it was “very disappointed that Maui County chose this litigious path," before investigations are complete.

The company faces raft of lawsuits alleging negligence, though precise causes of the fire have yet to be determined.

Hawaiian Electric is also under scrutiny for removing downed utility poles and other equipment before investigators from the federal Bureau of Alcohol, Tobacco, Firearms and Explosives arrived on scene, according to the Washington Post. Those actions may have violated guidelines on how utilities handle evidence.

Shares of Hawaiian Electric ended Friday at a new 52-week low of $9.66, down 18.55% on the day and down 77.29% year to date. The company has said it hopes to avoid bankruptcy but it has also confirmed that it is consulting with restructuring advisors.