Essential Power LLC 'BB-' Rating Affirmed; Outlook Revised To Negative From Stable

In our view, Essential Power LLC could face lower cash flows as a result of slowing demand growth and declining energy margins in both New England and the PJM. We affirmed our 'BB-' issue ratings on Essential Power LLC's $565 million term loan B and $100 million revolving credit facility but revised the outlook to negative from stable. The change to negative reflects a one-in-three chance that cash flows and debt service coverages will be weaker than anticipated in our base case. The negative outlook also factors in deleveraging that has lagged our expectations by about $30 million compared with our expectations in 2015. There have been no meaningful sweeps of the term loan since loan inception in 2012 with

...+ In our view, Essential Power LLC could face lower cash flows as a result of slowing demand growth and declining energy margins in both New England and the PJM. + We affirmed our '##-' issue ratings on Essential Power LLC's $565 million term loan B and $100 million revolving credit facility but revised the outlook to negative from stable. + The change to negative reflects a one-in-three chance that cash flows and debt service coverages will be weaker than anticipated in our base case. + The negative outlook also factors in deleveraging that has lagged our expectations by about $30 million compared with our expectations in 2015. There have been no meaningful sweeps of the term loan since loan inception in 2012 with net deleveraging of only $30 million through September 2015. We note though that the revolver has been substantially repaid in 2015. NEW YORK (Standard & Poor's) Jan. 8, 2016--Standard & Poor's Ratings Services today affirmed its '##-' senior secured project rating on Essential...

Ratings Action