Moody's may lift Allegheny Energy

Moody's Investors Service said it placed the long-term ratings of Allegheny Energy, Inc. and its subsidiaries Allegheny Energy Supply Co., LLC and Allegheny Generating Co. under review for upgrade. Allegheny's speculative grade liquidity is affirmed at SGL-2.

Ratings under review are Allegheny Energy's Ba2 corporate family and probability-of-default ratings and Ba2 senior secured bank credit facility; Allegheny Energy Supply's Ba2 corporate family and probability-of-default ratings, Baa3 senior secured bank credit facility and Ba3 senior unsecured regular bond/debenture; and Allegheny Generating's Ba3 rated senior unsecured regular bond/debenture.

The rating action reflects sustained improvement in key credit fundamentals due to stronger operating and financial results at its generation subsidiary Allegheny Energy Supply, the agency said. Over the past few years, plant availability across the generation fleet has improved while system-wide operating and maintenance expenses have declined. The issuer also benefits from better market prices for electricity under multi-year forward arrangements, according to Moody's.

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