Standard&Poor's Ratings Services said today that Cleco Corp.'s (BBB/Negative/A-3) announcement of a signed letter of intent to sell the 725 MW Perryville power plant to a subsidiary of Entergy Corp. is positive for credit quality, but will not immediately affect the company's credit ratings. The move is consistent with Cleco's stated strategy of reducing exposure to the merchant power market. The transaction is also expected to strengthen the company's credit-protection measures as sale proceeds are used to reduce indebtedness and the project financing attached to the plant is removed. The steps Cleco is taking to return to its core utility roots, such as this sale of Perryville, were important factors in the recent removal of its ratings from
