Cleco Corp. And Subsidiary Ratings Affirmed On Announcement Of Merchant Power Generation Asset Purchase

Cleco Corporate Holdings LLC (Cleco Corp.) announced that it will acquire South Central Generating LLC, a mostly contracted merchant generation portfolio, for about $1 billion. We are affirming our 'BBB-' issuer credit rating on Cleco Corp. and 'BBB+' issuer credit rating on subsidiary Cleco Power LLC (Cleco Power). The rating outlooks remain stable. We are revising our assessment of the company's business risk profile, reflecting the company's acquisition of 3,555 megawatts of mostly contracted merchant generation, which will reduce the relative size of the company's lower-risk regulated utility business to about 75% of consolidated EBITDA from 100%. We expect improving financial measures and management's commitment to maintain credit quality to offset the weakening in the business risk profile. The stable

...+ Cleco Corporate Holdings LLC (Cleco Corp.) announced that it will acquire South Central Generating LLC, a mostly contracted merchant generation portfolio, for about $1 billion. + We are affirming our '###-' issuer credit rating on Cleco Corp. and '###+' issuer credit rating on subsidiary Cleco Power LLC (Cleco Power). The rating outlooks remain stable. + We are revising our assessment of the company's business risk profile, reflecting the company's acquisition of 3,555 megawatts of mostly contracted merchant generation, which will reduce the relative size of the company's lower-risk regulated utility business to about 75% of consolidated EBITDA from 100%. We expect improving financial measures and management's commitment to maintain credit quality to offset the weakening in the business risk profile. + The stable outlook reflects our expectation that Cleco Corp. will continue to consist of mostly lower-risk regulated utility operations that will support gradual improvement of its funds...

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