S&P cuts Oregon Clean Energy

S&P said it lowered Oregon Clean Energy LLC’s senior secured debt to B+ from BB-. The recovery rating on this debt remains 2 (80% rounded estimate).

Lower capacity prices for the Pennsylvania-New Jersey-Maryland Interconnection will weaken the issuer’s debt-service-coverage ratios in 2023.

“The PJM Capacity Auction prices for the 2022-2023 delivery year were materially lower than our expectations. The PJM Regional Transmission Organization (RTO) price for 2022-2023 is $50/MW-day. Compared to our previous forecast of $85/MW-day, the cleared price results in a roughly $8.5 million decline in 2022-2023 capacity revenues,” S&P said in a press release.

The outlook is stable. “Despite weakness in 2023, we project average DSCRs of about 1.7x through the maturity of OCE's term loan in 2026,” the agency said.

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