Moody’s gives Talen B1, loans, notes Ba3

Moody's Investors Service said it assigned Ba3 ratings to Talen Energy Supply LLC’s planned senior secured bank revolving credit facility, notes and term loans and a B3 rating to its senior unsecured bonds issued by Pennsylvania Economic Development Financial Authority. The agency also assigned Talen a B1 corporate family rating and B1-PD probability of default rating. The speculative grade liquidity rating is SGL-2, and the outlook is stable.

The agency said it assigned the ratings because the company is preparing to emerge from bankruptcy.

"Talen's B1 CFR incorporates our expectation that its nuclear and fossil fuel power plant operations will produce adequate cash flow to support the lower debt levels incorporated in its post-bankruptcy capital structure," stated Edna Marinelarena, a Moody’s assistant vice president, in a press release.

Talen’s new capital structure will include an $825 million senior secured term loan B and about $825 million of senior secured notes. Additional planned senior secured debt will include Talen's $575 million revolving credit facility and a $545 million term loan C for letters of credit.

The only unsecured debt will be Talen's pre-bankruptcy Pedfa bonds, series B and C which total $131 million. There is also $295 million of non-recourse debt issued by LMBE-MC Holdco II LLC and about $185 million of debt issued by Cumulus Digital LLC.

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