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���������ֳ� - New York - 08 Mar 2021: ���������ֳ� has assigned a 'BBB+' rating to Eversource Energy's $350 million issuance of series S senior unsecured notes. The notes will mature March 15, 2031 and rank pari passu with Eversource's other existing senior unsecured debt. Net proceeds from the issuance will be used to refinance short-term debt, including short-term debt used to redeem the series I senior unsecured notes on Feb. 16, 2021.

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.

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 880MW Sunrise Wind project serving New York. There is also the potential for development of other offshore wind projects.

���������ֳ� expects the development of these large, multibillion dollar offshore wind projects will slightly weaken Eversource's leverage metrics through 2023, when South Fork Wind is expected to enter service. Near-term credit concerns are partially mitigated by Eversource's commitment to issue $1.2 billion of common equity through 2025 to help partially fund offshore wind construction costs and the large utility capex plan.

Large Utility Capex Plan: Eversource expects to spend $17.0 billion in capex for core businesses, predominantly regulated utilities, over 2021-2025. This utility capex is a relatively low-risk growth plan, including more than $6.4 billion in electric distribution and solar energy, more than $4.4 billion in natural gas distribution, $4.3 billion in FERC-regulated electric transmission and $780 million 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.

Weakened Financial Profile: Leverage weakened in 2017 due to the Aquarion Water Company acquisition and remained weak in 2018 due to tax reform and, in 2019, due to the Northern Pass Transmission write-off. FFO leverage in each of those years exceeded ���������ֳ�'s longer-term negative sensitivity level of 5.2x (5.7x in 2017, 5.8x in 2018 and 5.8x in 2019).

The higher leverage was expected to be temporary in each of those years. Eversource's financial profile is supported by stable and predictable cash flow from its regulated utility subsidiaries, which have strong stand-alone financial profiles. ���������ֳ� expects Eversource's FFO leverage to improve and average around 5.3x-5.5x over 2020-2023.

Eversource's elevated leverage over the forecast period is due to the company's offshore wind growth projects, which require multiple years of investment, permitting and construction. ���������ֳ� does not expect cash inflows from these projects until 2023 at the earliest, resulting in high leverage before then.

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. Significant delays and cost overruns or other project concerns could result in ���������ֳ� taking a negative rating action.

Coronavirus: ���������ֳ� does not expect the coronavirus to have a material impact on the credit quality of Eversource or its utility subsidiaries. Liquidity is adequate to cover near-term needs and there are no significant operational concerns at this time. Eversource's utilities benefit from revenue decoupling in Massachusetts and Connecticut, which should insulate them from lower usage by commercial and industrial customers, and there are mechanisms in place to help with customer bad debt expense.

Parent/Subsidiary Linkage: ���������ֳ� uses a bottom-up approach in determining the ratings of Eversource and its utility subsidiaries. The linkage follows a weak parent/strong subsidiary approach. ���������ֳ� considers NSTAR Electric Company (A/Stable), The Connecticut Light and Power Company (CL&P; A-/Stable), Public Service Company of New Hampshire (PSNH; A-/Stable) and NSTAR Gas Company (A-/Stable) to be stronger than Eversource due to the utilities' low-risk, regulated operations and the relatively balanced regulatory jurisdictions in which they operate.

There is moderate linkage between Eversource's Long-Term IDR and that of each utility subsidiary. This is supported by the utilities' access to debt capital markets and the cash flow diversification provided by seven utility businesses. However, the utilities lack strong ring-fencing provisions. ���������ֳ� could allow up to a two-notch difference in the Long-Term IDRs of Eversource and any of its utility subsidiaries.

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+/Stable) operate in some of the same states in the Northeast in relatively balanced regulatory environments. Eversource and AVANGRID both benefit from a meaningful amount of regulatory diversification and significant exposure to electric transmission assets that are regulated by FERC, favorable factors that peer Consolidated Edison, Inc. (ConEd; BBB+/Negative) lacks. AVANGRID's unregulated renewable energy business accounts for nearly 25% of consolidated EBITDA, weakening AVANGRID's business risk profile.

Eversource and AVANGRID are also engaged in the development of 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 5.3x-5.5x through 2023 for Eversource and 5.0x for AVANGRID.

Key Assumptions

���������ֳ�'s key assumptions within its rating case for Eversource include:

--Consolidated rate base growing to $31.3 billion by YE25, from $19.8 billion at YE19.

--Consolidated core business capex of $17.0 billion over 2021-2025.

--Offshore wind in-service dates: YE23 for South Fork Wind, 2024 for Revolution Wind and 2025 for Sunrise Wind.

--Flat to declining electric sales growth.

--Natural gas sales growth averaging 2% per year.

--Normal weather.

RATING SENSITIVITIES

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

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

Factors that could, individually or collectively, lead to a 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, cost overruns or other concerns related to the development of the company's offshore wind projects that would meaningfully negatively affect the company's cash flow profile.

--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 the liquidity of Eversource and each of its regulated utility subsidiaries to be adequate.

Eversource has a $2.0 billion CP program the company uses to provide its subsidiaries with intercompany loans. Eversource had $1,054.3 million of CP borrowings outstanding as of Dec. 31, 2020, leaving $945.7 million of available borrowing capacity.

Eversource, CL&P, PSNH, NSTAR Gas, Yankee Gas Services Company (not rated) and Aquarion Water Company of Connecticut (not rated) participate in a joint $1.45 billion revolving credit facility (RCF) that terminates on Dec. 6, 2024. Under the RCF, there is a $600 million borrowing sublimit for CL&P, a $300 million sublimit for each of PSNH, NSTAR Gas and Yankee Gas, and a $100 million sublimit for Aquarion. Eversource and Eversource Gas Company of Massachusetts (EGMA; not rated) have a $550 million RCF that terminates on Oct. 20, 2021. The $1.45 billion RCF and $550 million RCF serve to backstop Eversource's CP program.

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 Dec. 6, 2024. NSTAR Electric had $195 million of CP borrowings outstanding as of Dec. 31, 2020, leaving $455 million of available borrowing capacity.

Eversource and its utility subsidiaries require modest cash on hand and had $106.6 million of unrestricted cash as of Dec. 31, 2020.

Manageable Debt Maturities: Long-term debt maturities over the next five years are manageable. At the parent level, Eversource has $750 million of 2.75% senior unsecured notes due March 15, 2022; $450 million of 2.8% senior unsecured notes due May 1, 2023; $400 million of 3.8% senior unsecured notes due Dec. 1, 2023; $450 million of 2.9% senior unsecured notes due Oct. 1, 2024; $300 million of 3.15% senior unsecured notes due Jan. 15, 2025 and $300 million of 0.8% senior unsecured notes due Aug. 15, 2025.

Summary of Financial Adjustments

Financial statement adjustments that depart materially from those contained in the published financial statements of Eversource Energy are disclosed below:

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

Date of Relevant Committee

19 March 2020

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), v7.9.0 (1)

ADDITIONAL DISCLOSURES

• Solicitation Status
• Endorsement Policy

ENDORSEMENT STATUS