Fitch Ratings says it expects NextEra Energy Inc.’s proposed $4.3 billion acquisition of Hawaiian Electric Industries to be approved and that over the long term the agency sees a bias toward positive rating actions for Hawaiian Electric Co. and HEI under the Florida utility’s ownership.

In the meantime Fitch affirmed last week the Issuer Default Rating (IDR) for Hawaiian Electric Co. at “BBB+” with a Stable Rating Outlook, and maintained parent company HEI, which has an issuer default rating of “BBB,” on Rating Watch Positive.

The ratings agency expects to resolve the Rating Watch upon conclusion of the transaction. A decision is expected by the Hawaii Public Utilities Commission in the first half of next year.

If the transaction is completed, HEI would become a first-tier holding company under NextEra Energy Capital Holdings, and Fitch expects to match the IDR of HEI with that of HECO once American Savings Bank is spun off. The acquisition would not result in any change in HECO’s rating, Fitch said.

“The structural weakness in HECO’s service territory due to rising penetration of rooftop solar, the concessions offered for merger approval and the uncertainty regarding the fleet modernization plan until the Power Supply Improvement Plan is approved by the regulators offset the positives of (NextEra’s) ownership and a sharp decline in oil prices over last year,” Fitch said. “Over the long term, Fitch sees a bias toward positive rating actions for HECO and HEI under (NextEra’s) ownership.”

In the event that the transaction is not completed, which Fitch said is “not anticipated,” the credit profile of HECO and HEI will remain “robust.”

“HEI would retain American Savings Bank, whose financial profile remains strong. HEI would use retained earnings and access to capital markets to fund equity infusions in HECO as the utility embarks upon a fleet modernization plan,” Fitch said. “Fitch expects HEI to maintain a balanced approach to funding and for HECO to maintain its regulatory approved capital structure.”