Moody's downgrades Crockett notes

Moody's Investors Service said it downgraded Crockett Cogeneration, LP's senior secured notes to B3 from B2 and revised the outlook to negative from stable.

“Today's rating action reflects the project's severe decline in liquidity and limited financial flexibility owing to a large outflow of cash during the year associated with the project's requirement to purchase and deliver greenhouse gas emission allowances by November 2021,” Moody’s said in a press release.

Crockett used $2 million from its debt-service reserve account in June, and the agency said it expects the project to continue dipping into the account.

The outlook reflects the forecast the project's financial flexibility will be very limited over the next 12 to 18 months without a full debt-service reserve account and may need sponsor support to meet all its obligations, the agency said.

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