Moody's affirms AES Ironwood, AES Red Oak

Moody's Investors Service said it affirmed the B1 senior secured ratings for AES Corp. subsidiaries AES Ironwood, LLC and AES Red Oak, LLC.

The outlook remains stable.

The affirmation follows the announcement by the Williams Cos., Inc. (Ba2/under review for upgrade) that it will sell its power assets, including its obligation under its tolling arrangements with Ironwood and Red Oak, to Bear Energy LP, a unit of the Bear Stearns Cos.

The agency said that while the transaction is expected to result in a significant improvement in its offtaker's credit profile, the ratings of Ironwood and Red Oak remain constrained by their weak competitive and financial positions. Specifically, market conditions for gas-fired power plants within the PJM power pool remain weak due to excess generating capacity and high natural gas prices. This has caused the companies' dispatch ratios to be relatively low and their senior debt service coverage ratios are not expected to exceed 1.2x over the medium term, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.