Fitch cuts Midland Cogeneration

Fitch Ratings said it downgraded the rating of Midland Cogeneration Venture LP's combined $395 million in outstanding senior secured notes to BB- from BB+.

“The rating downgrade reflects lower rating case expectations driven by reduced contracted revenues from the settlement agreement with Consumers Energy (Consumers), which permanently sets the fixed energy rate (FER) at a lower rate than previous forecasts, Fitch said in a press release.

The revised forecast results in a Fitch-calculated average rating case debt service coverage ratio of 1.16x on the basis of contracted-only revenues and 1.28x when including forecasted merchant revenues, the agency said.

“This level of coverage suggests a more limited margin of cash flow cushion to support mandatory debt payments,” Fitch said.

The outlook is stable.

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