Research Update: Carroll County Energy LLC 'BB' Term Loan Rating Affirmed; Recovery Revised To '2' On Higher Debt

On Oct. 8 Carroll County Energy LLC (CCE), a natural gas-fired power plant that sells energy and capacity into the Pennsylvania-New Jersey-Maryland (PJM) Interconnection, upsized their existing $455 million term loan B by $25 million. CCE has also executed hedges for the term loan to better manage interest rate exposure. Although the $25 million upsize will somewhat lower credit metrics in the near term, the incremental increase in debt does not materially affect overall credit quality. Consequently, we are affirming our 'BB' rating on CCE's term loan and credit facility. We are revising our recovery expectation to '2' from '1', reflecting the higher projected debt levels at default. The '2' recovery rating indicates our expectation for substantial (70%-90%; rounded estimate:

...- On Oct. 8 Carroll County Energy LLC (CCE), a natural gas-fired power plant that sells energy and capacity into the Pennsylvania-New Jersey-Maryland (PJM) Interconnection, upsized their existing $455 million term loan B by $25 million. - CCE has also executed hedges for the term loan to better manage interest rate exposure. - Although the $25 million upsize will somewhat lower credit metrics in the near term, the incremental increase in debt does not materially affect overall credit quality. Consequently, we are affirming our '##' rating on CCE's term loan and credit facility. - We are revising our recovery expectation to '2' from '1', reflecting the higher projected debt levels at default. The '2' recovery rating indicates our expectation for substantial (70%-90%; rounded estimate: 80%) recovery in a default scenario. - The stable outlook reflects our expectation that the project will continue to operate in line with our expectations and generate an average DSCR of about 2.4x through...

Research Update