Moody's downgrades Exelon

Moody's Investors Service said it downgraded the long-term senior unsecured ratings of Exelon Corp. to Baa2 from Baa1 and its primary subsidiary, Exelon Generation Co., LLC, to Baa1 from A3.

Concurrently, Moody's said it affirmed the short-term rating for commercial paper at Prime-2 for Exelon and Exelon Generation.

The outlook is negative.

Moody's said the downgrades follow the closing of Exelon's merger with Constellation Energy Group, Inc.

"Today's rating action factors in Exelon's expansion of its unregulated business platform through the merger with financially weaker CEG," Moody's senior vice president A.J. Sabatelle said in a news release.

"While the merger benefits are notable, particularly from a commercial and liquidity standpoint, the transaction increases the potential for earnings and cash flow volatility during the current down commodity cycle."

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