Moody's shifts Elwood trend to negative

Moody's Investors Service said it affirmed the rating on Elwood Energy LLC's 8.159% senior secured bond due 2026 at Ba2 and changed the outlook to negative from stable.

“Today's rating action reflects the deteriorating business environment for Elwood's collection of 1.35 GW of peaking units, which primarily rely on PJM Interconnection, L.L.C. (Aa2 stable) capacity auction revenues for debt service. PJM capacity prices have continued to decline, especially in the Comed zone where Elwood competes, and we expect Comed will no longer receive premium auction pricing as it has in prior years,” the agency said in a press release.

The outlook reflects the view that Elwood's debt-service coverage ratio will fall below 1x and that it will rely on internal liquidity to meet obligations in 2023 and 2024, the agency said.

However, Moody’s noted Elwood has very low leverage and strong liquidity.

© 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.