Research Update: Carroll County Energy LLC's Senior Secured Debt Assigned Preliminary 'BB' Issue And '1' Recovery Ratings; Outlook Stable

Carroll County Energy LLC (CCE) has proposed an issuance of $460 million senior secured term loan B due 2026 and $70 million senior secured revolving credit facility due 2026. We expect CCE to use proceeds from the issuance to primarily refinance the existing construction term loan and fund a distribution to sponsors. CCE is a natural gas fired power plant that sells energy and capacity into the Pennsylvania-New Jersey-Maryland (PJM) Interconnection, a market pressured by weak demand growth and oversupply. We are assigning a preliminary 'BB' rating to Carroll County Energy LLC's senior secured debt. The preliminary '1' recovery rating indicates our expectation of very high recovery (90%-100%; rounded estimate: 95%) recovery in the event of default. The stable outlook

...+ Carroll County Energy LLC (CCE) has proposed an issuance of $460 million senior secured term loan B due 2026 and $70 million senior secured revolving credit facility due 2026. We expect CCE to use proceeds from the issuance to primarily refinance the existing construction term loan and fund a distribution to sponsors. + CCE is a natural gas fired power plant that sells energy and capacity into the Pennsylvania-New Jersey-Maryland (PJM) Interconnection, a market pressured by weak demand growth and oversupply. + We are assigning a preliminary '##' rating to Carroll County Energy LLC's senior secured debt. The preliminary '1' recovery rating indicates our expectation of very high recovery (90%-100%; rounded estimate: 95%) recovery in the event of default. + The stable outlook reflects our expectation that CCE will maintain a debt services coverage ratio (DSCR) above 2.0x over the seven-year debt tenor. We also expect CCE to maintain a capacity factor around 90% over the next seven years....

Research Update