Research Update: Carroll County Energy LLC 'BB' Rating Affirmed On Stable Expected Performance Despite Lower Power Prices, Outlook Stable

Carroll County Energy LLC (CCE) is a natural gas-fired power plant that sells energy and capacity into the Pennsylvania-New Jersey-Maryland (PJM) Interconnection, which is a market that has recently experienced weak power prices. Despite the lower market power prices, CCE has benefitted from a stable cash flow profile due to its largely hedged gross margins. Consequently, we are affirming our 'BB' rating on CCE's senior secured debt. The '1' recovery rating remains unchanged, indicating our expectation for very high (90%-100%; rounded estimate: 90%) recovery in a default scenario. The stable outlook reflects our expectation that CCE will maintain stable operational performance and sweep between $20 million and $25 million in 2020 as market conditions improve while maintaining a debt service

...- Carroll County Energy LLC (CCE) is a natural gas-fired power plant that sells energy and capacity into the Pennsylvania-New Jersey-Maryland (PJM) Interconnection, which is a market that has recently experienced weak power prices. - Despite the lower market power prices, CCE has benefitted from a stable cash flow profile due to its largely hedged gross margins. - Consequently, we are affirming our '##' rating on CCE's senior secured debt. - The '1' recovery rating remains unchanged, indicating our expectation for very high (90%-100%; rounded estimate: 90%) recovery in a default scenario. - The stable outlook reflects our expectation that CCE will maintain stable operational performance and sweep between $20 million and $25 million in 2020 as market conditions improve while maintaining a debt service coverage ratio (DSCR) of about 2.0x over the next 12 months....

Research Update