S&P shifts LMBE-MC view to negative

S&P said it changed its outlook for LMBE-MC HoldCo II LLC to negative from stable and affirmed the BB- issue and 1 recovery rating on its senior secured debt. The 1 rating indicates very high (90%-100%; rounded estimate: 95%) recovery in default.

“We expect LMBE will realize materially lower capacity revenue in future periods. Both of LMBE's assets are in the Mid-Atlantic Area Council (MAAC) zone of the PJM. In June, capacity prices for MAAC cleared at $49.49 per megawatt-day (/MW-day) for the 2023-2024 delivery period, which we previously forecast at $80/MW-day.

“We also recently lowered our expectations for future PJM capacity prices across zones. Capacity prices in the Pennsylvania-New Jersey-Maryland Interconnection (PJM) cleared lower than our expectations for the 2023/2024 delivery year. We also lowered our assumptions for future capacity prices, which reduced our cash flow expectations for LMBE-MC HoldCo LLC (LMBE),” S&P said in a press release.

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