Moody's ups Elwood Energy notes to Ba1

Moody's Investors Service said it upgraded Elwood Energy, LLC's 8.159% senior secured notes due 2026 to Ba1 from Ba2.

The outlook is stable.

Moody's said the upgrade reflects substantial improvement in counterparty credit quality following Aquila, Inc.'s (B2 senior unsecured; positive outlook) assignment of its power sales agreements with Elwood to Constellation Energy Commodities Group, Inc., which is a subsidiary of Constellation Energy Group.

The Ba1 rating is also supported by Elwood's stable financial performance during its contracted period, resulting in average debt service coverage ratios of around 1.5x, which is likely to continue through 2012, the agency said.

While these financial metrics would be supportive of a low investment-grade rating for a fully contracted power project, the rating factors in Elwood's sizeable exposure to non-contracted merchant markets beginning in 2017, Moody's added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.