Topeka ? A national rating agency says Westar Energy Inc.’s financial outlook is positive, though it believes Westar might need to issue new stock to improve its credit significantly.

Standard & Poor’s revised its outlook for Westar from “developing” to “positive” after Westar announced it had found buyers for its 88 percent ownership interest in the Protection One security alarm firm. In a statement issued this week, S&P reaffirmed its existing credit rating of “BB+” for Westar’s corporate debt.

S&P’s statement said it revised its outlook for Westar because of “meaningful steps” the electric utility had taken to improve its finances. Westar is trying to shed its nonutility assets and reduce its debt, now estimated at $2.3 billion, down from $3.6 billion a year ago.

“That’s good news,” Westar spokeswoman Karla Olsen said Wednesday. “We certainly feel we’re moving in the right direction.”

Westar’s credit ratings have been a key issue for the Kansas Corporation Commission because higher ratings increase Westar’s borrowing costs.

In the S&P rating system, “BB” means a company faces ongoing uncertainties, with the possibility that adverse business conditions will prevent it from meeting financial commitments. State regulators would like Westar to achieve an “A” rating from S&P, meaning it has a strong capacity to meet its commitments.

Jim Zakoura, an Overland Park attorney who represents large Westar customers, said the S&P announcement shows that rating agencies were watching Westar closely.

Zakoura said the KCC probably would review Westar’s rates again in 2005, and Westar’s borrowing costs will be an issue.