S&P cuts AES Eastern Energy

Standard & Poor's said it lowered the ratings on AES Eastern Energy LP's $550 million of pass-through certificates due 2029 to CC from CCC.

The outlook remains negative.

The agency also said it revised the recovery rating to 3 from 2, indicating 50% to 70% expected recovery in a default.

Due to the high price of coal relative to electricity prices, the company continues to see compression of dark spread margins, S&P said, adding that these dark spreads will remain for the balance of 2011 in the range of $6.5 per megawatt-hour, which are not adequate to meet all fixed obligations.

With forecasted energy prices still low, a hedge strategy continues to be uneconomical, the agency 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.