Research Update: Carroll County Energy LLC Senior Secured Debt Rating Lowered To 'BB-' From 'BB' On Revised Capacity Prices

Lower projected capacity prices in PJM will likely result in declining cash flows for Carroll County Energy LLC (CCE), which would lead to a higher debt balance at maturity than previously expected. As a result, S&P Global Ratings lowered its issue-level rating on CCE's senior secured debt, including its term loan B (TLB) and revolving credit facility (RCF), to 'BB-' from 'BB'. The recovery rating is unchanged at '2', indicating our expectation for substantial (70%-90%; rounded estimate: 75%) recovery in a default scenario. The stable outlook reflects our expectation that CCE will continue to generate sufficient cash flows, spurred by adequate operational performance, that should result in a minimum debt service coverage ratio (DSCR) of 1.43x in the post-refinancing period.

...- Lower projected capacity prices in PJM will likely result in declining cash flows for Carroll County Energy LLC (CCE), which would lead to a higher debt balance at maturity than previously expected. - As a result, S&P Global Ratings lowered its issue-level rating on CCE's senior secured debt, including its term loan B (TLB) and revolving credit facility (RCF), to '##-' from '##'. The recovery rating is unchanged at '2', indicating our expectation for substantial (70%-90%; rounded estimate: 75%) recovery in a default scenario. - The stable outlook reflects our expectation that CCE will continue to generate sufficient cash flows, spurred by adequate operational performance, that should result in a minimum debt service coverage ratio (DSCR) of 1.43x in the post-refinancing period....

Research Update