Moody's: Kincaid view negative

Moody's Investors Service said it affirmed Kincaid Generation LLC's Baa3 rating on its senior secured bonds.

The outlook was revised to negative from stable.

The outlook revision reflects the expected expiration of the power purchase agreement with Exelon Generating in February 2013, resulting in the project being fully exposed to the merchant power market, Moody's said.

Given the cyclical and unpredictable nature of merchant energy margins, the agency said it expects Kincaid will likely have much more volatile cash flows and financial metrics starting in March 2013.

The negative outlook also considers the significant environmental capital program at Kincaid and exposure to new environmental regulations.

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