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���������ֳ� - New York - 01 Mar 2023: ���������ֳ� has assigned a 'BBB+' rating to Eversource Energy's issuance of series Z, senior unsecured notes. The notes rank pari passu with Eversource's other existing senior unsecured debt. Net proceeds from the issuance will be used to repay Eversource's $450 million notes maturating on May 1, 2023 with the remaining amounts used to pay down a portion of the short-term debt.

Eversource's Long-Term Issuer Default Rating (IDR) is 'BBB+' with a Stable Rating Outlook.

Key Rating Drivers

Regulatory Diversification: Eversource's three-state service territory provides regulatory diversification that is further enhanced by significant investments in electric transmission projects regulated by the Federal Energy Regulatory Commission (FERC).

���������ֳ� considers FERC to be among the most constructive regulatory bodies due to timely cost recovery and formulaic rates of return. FERC-regulated electric transmission operations account for more than one-third of Eversource's consolidated rate base; Connecticut and Massachusetts each account for a little less than one-third of consolidated rate base, with New Hampshire accounting for the remainder.

Offshore Wind Projects: Eversource and Danish wind energy developer Orsted A/S (BBB+/Stable) have a 50/50 joint venture for offshore wind assets in the Northeast. The companies are partnering in the development of the 130MW South Fork Wind offshore wind project serving New York, the 704MW Revolution Wind offshore wind project serving Rhode Island and Connecticut, and the 924MW Sunrise Wind project serving New York. Other offshore wind projects may also be developed.

���������ֳ� expects the development of these large, multibillion-dollar offshore wind projects will slightly weaken Eversource's leverage metrics until they enter service and start generating cash flow. Near-term credit issues are mitigated by Eversource's commitment to issue common equity through 2026 to help partially fund the large utility capex plan.

Offshore Wind Strategic Review: Eversource's strategic review of its offshore wind business is ongoing and taking longer than expected. Eversource announced in May 2022 that it has commenced a strategic review of its offshore wind investments that could result in the potential sale of all or part of its 50% interest. The review is expected to conclude in mid-2023. ���������ֳ� would consider the sale of Eversource's offshore wind investments to be beneficial to the company's business risk profile but likely not to have an impact on Eversource's ratings, depending on management's use of proceeds.

Large Utility Capex Plan: Eversource expects to spend $21.5 billion in capex for core businesses, predominantly regulated utilities, over 2023-2027. This utility capex is a relatively low-risk growth plan, including around $8.9 billion in electric distribution, around $5.3 billion in natural gas distribution, $5.2 billion in FERC-regulated electric transmission and nearly $1.0 billion in water distribution. Most of Eversource's planned utility capex will be recovered with limited lag, reflecting FERC construction work in progress, electric distribution trackers and natural gas distribution infrastructure expansion cost-recovery mechanisms.

Weak Financial Profile: Eversource's financial profile is supported by stable cash flow from its regulated utility subsidiaries, which have strong standalone financial profiles. ���������ֳ� expects Eversource's FFO leverage to average around 5.5x through 2025. Elevated leverage over the forecast period is due to offshore wind growth projects, which require multiple years of investment, permitting and construction. ���������ֳ� does not expect cash inflows from the South Fork Wind until YE 2023, and for Revolution Wind and Sunrise Wind until YE 2025.

Once these projects are on line, they are expected to provide robust and stable cash flow supported by long-term contracts and near-term tax benefits. The strength and stability of future cash flow provide reassurance that Eversource's high FFO leverage metric will likely return to within the longer-term threshold of ���������ֳ�'s negative sensitivity.

Parent/Subsidiary Linkage: Parent and subsidiary linkage exists and follows a weak parent/strong subsidiary approach. ���������ֳ� considers NSTAR Electric, CL&P, PSNH and NSTAR Gas to be stronger than Eversource due to the utilities' low-risk, regulated operations and the relatively balanced regulatory jurisdictions in which they operate.

���������ֳ� considers the legal ring-fencing factor "porous" due to the general protections afforded by economic regulation, including a restriction on dividend payments; the access and control factor is also evaluated as "porous." Eversource centrally manages the treasury function for its utilities and is the sole source of equity. Eversource and most of its utility subsidiaries also share a revolving credit facility (RCF); however, each subsidiary issues its own long-term debt. ���������ֳ� would allow the utilities' Long-Term IDRs to be up to two notches higher than Eversource's.

Derivation Summary

Eversource is comfortably positioned in the 'BBB+' rating category. Eversource has a strong business risk profile, primarily attributed to its ownership predominantly of regulated utilities. The utility subsidiaries of Eversource and peer AVANGRID, Inc. (BBB+/Negative) operate in some of the same states in the Northeast in relatively balanced regulatory environments. Eversource and AVANGRID benefit from a meaningful amount of regulatory diversification and significant exposure to FERC-regulated electric transmission assets, favorable factors that peer Consolidated Edison, Inc. (BBB+/Stable) lacks. AVANGRID's unregulated renewable energy business accounts for nearly 25% of consolidated EBITDA, weakening its business risk profile.

Eversource and AVANGRID also are engaged in developing large offshore wind projects in the Northeast, which include increased risk during the multiyear permitting and construction phases, but would provide long-term contracted cash flow once in operation. ���������ֳ� expects FFO leverage to average around 5.5x through 2025 for Eversource and 5.0x for AVANGRID.

Key Assumptions

���������ֳ�'s Key Assumptions Within Its Rating Case for the Issuer Include:

--Consolidated rate base growing to $37.7 billion by YE 2027, up from $24.4 billion at YE 2021;

--Consolidated core business capex as per management's assumptions;

--Operations and maintenance expense relatively flat;

--South Fork Wind expected to be in service by YE 2023; Revolution Wind and Sunrise Wind begins in service by YE 2025;

--Normal weather.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

--FFO leverage expected to remain less than 4.5x on a sustained basis.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

--FFO leverage expected to exceed 5.6x on a sustained basis during the offshore wind project permitting and construction phases, followed by 5.2x after beginning service;

--Significant delays or cost overruns or other issues related to the development of the company's offshore wind projects that would negatively affect Eversource's cash flow profile meaningfully;

--Adverse regulatory actions or other events that result in downgrades to Eversource's utility subsidiaries.

Best/Worst Case Rating Scenario

International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit /site/re/10111579.

Liquidity and Debt Structure

Adequate Liquidity: ���������ֳ� considers liquidity for Eversource and each of its regulated utility subsidiaries to be adequate.

Eversource has a $2.0 billion CP program that the company uses to provide its subsidiaries with intercompany loans. Eversource had $1,442.2 million of CP borrowings outstanding at Dec. 31, 2022, leaving $557.8 million of available borrowing capacity.

Eversource, CL&P, PSNH, NSTAR Gas, Yankee Gas Services Company (not rated), Eversource Gas Company of Massachusetts (EGMA; not rated) and Aquarion Water Company of Connecticut (not rated) participate in a joint $2.0 billion RCF that terminates on Oct. 15, 2027. Under the RCF, CL&P has a $600 million borrowing sublimit; PSNH, NSTAR Gas, EGMA and Yankee Gas each have a $300 million sublimit; and Aquarion Water Company of Connecticut has a $100 million sublimit. The RCF serves to backstop Eversource's CP program. There were no RCF borrowings outstanding as of Dec. 31, 2022.

NSTAR Electric maintains its own $650 million CP program backstopped by an equal-sized RCF. NSTAR Electric's $650 million RCF is separate from the shared RCF of parent Eversource and the other utilities, but also terminates on Oct. 15, 2027. As of Dec. 31, 2022, there were no borrowings outstanding leaving the facility fully available.

Eversource and its utility subsidiaries require modest cash on hand and had $374.6 million of unrestricted cash as of Dec. 31, 2022.

Manageable Debt Maturities: Long-term debt maturities over the next five years are manageable. At the parent level, Eversource has $450 million of 2.8% senior unsecured notes due May 1, 2023; $350 million of floating rate senior unsecured notes due Aug. 15, 2023; $400 million of 3.8% senior unsecured notes due Dec. 1, 2023; $900 million of 4.20% senior unsecured notes due June 27, 2024; $450 million of 2.9% senior unsecured notes due Oct. 1, 2024; $300 million of 3.15% senior unsecured notes due Jan. 15, 2025; $300 million of 0.8% senior unsecured notes due Aug. 15, 2025; $250 million of 3.35% senior unsecured notes due March 15, 2026; $300 million of 1.4% senior unsecured notes due Aug. 15, 2026; $650 million of 2.90% senior unsecured notes due March 1, 2027; and $600 million of 4.60% senior unsecured notes due July 1, 2027.

Issuer Profile

Eversource is a holding company that owns seven regulated utilities serving electric T&D, natural gas distribution and water distribution customers in Massachusetts, Connecticut and New Hampshire.

Summary of Financial Adjustments

--PSNH's securitization debt is removed from all financial metric calculations for PSNH and Eversource.

Date of Relevant Committee

08 April 2022

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on ���������ֳ�'s ESG Relevance Scores, visit .

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APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).

• Corporate Monitoring & Forecasting Model (COMFORT Model), v8.0.2 (1)

ADDITIONAL DISCLOSURES

• Solicitation Status
• Endorsement Policy

ENDORSEMENT STATUS