Moody's downgrades Elwood

Moody's Investors Service said it downgraded Elwood Energy LLC's senior secured bond ratings to Ba2 from Ba1.

The outlook was changed to stable from negative.

Moody's said the action reflects Elwood's expiring power sales agreements and the high volatility of PJM's RTO capacity prices.

Starting in 2013, roughly five of Elwood's nine units will rely on PJM's capacity and energy market for cash flows. Elwood's other four units are expected to remain contracted. Starting in 2017, all of Elwood's capacity and energy will be subject to merchant prices, the agency said.

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