Moody’s might lower Cleco

Moody's Investors Service said it placed the Baa3 issuer rating and senior secured rating of Cleco Corporate Holdings LLC on review for downgrade.

The agency affirmed the ratings of Cleco Power LLC, including its A3 issuer rating and A3 senior unsecured rating, with a stable outlook.

Moody’s said the action follows Cleco's announcement that it is acquiring several non-regulated generation assets from a subsidiary of NRG Energy Inc. (Ba3 positive) for total consideration of $1 billion.

"The review of Cleco's ratings is driven by our expectation that Cleco will finance the acquisition of non-regulated generation assets primarily with debt, increasing its already significant level of holding company debt," Moody’s analyst Nana Hamilton said in a news release.

"Even though the assets are largely contracted or will be leased over the medium term, the addition of non-regulated operations and incurrence of more debt to finance the transaction will weaken Cleco's credit risk profile."

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