Regulated utilities are a popular investment choice at times of high volatility because they sell necessities and receive a rate of return set by regulators, rather than the market. Utilities do, however, frequently need to help fund their operations throughout a given year.
Even before the effects of the pandemic are considered, certain circumstances like natural disasters and acquisitions had led some utilities to take on even more debt according to the report, causing S&P to downgrade their credit rating, place them on a negative outlook or put them on the “threshold” of either of those events.
