Fitch rates Exelon Generation notes BBB

Fitch Ratings said it assigned a BBB rating to Exelon Generation Co., LLC's new senior notes due March 15, 2022.

The agency also rates Exelon’s new 2.95% senior notes due Jan. 15, 2020 at BBB. The 2020 senior notes will be part of Exelon’s 2.95% series of senior notes initially issued on Jan. 8, 2015 in the amount of $750 million. Other than the initial offering price, the new 2020 senior notes will have identical terms as the previously issued 2020 senior notes.

Proceeds will be used to repay commercial paper largely incurred to fund a parent level tax obligation and for general corporate purposes.

Fitch said weak natural gas and power prices continue to restrict the earnings power and cash flow of Exelon’s competitive generation business with little relief in sight.

“Demand is also expected to remain sluggish due in large part to energy efficiency measures and slow economic growth. Favorably, Zero Energy Credit (ZEC) programs recently approved in New York and Illinois and the capacity pricing mechanism in PJM, where the majority of Exelon’s capacity is located provide a meaningful boost to earnings and cash flow,” the agency said in a news release.

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