Research Update: Constellation Energy Generation LLC Upgraded To 'BBB+' On Nuclear PTCs And Strong Financial Performance, Outlook Stable

We believe that the nuclear production tax credits (PTCs), which commence in 2024 and continue through 2032, will further support Constellation Energy Generation LLC?s (Constellation; CEG) business risk. We raised our issuer credit rating (ICR) on the company to 'BBB+' from 'BBB' to reflect the resulting stronger and more-predictable financial risk profile. CEG has $8.15 billion of on-balance-sheet debt as of September 30, 2023 (not all of which is rated debt as some of it is unrated project financing). The stable outlook reflects our belief that CEG's PTCs will provide greater visibility into its cashflows. It also reflects our expectation that the company will maintain S&P Global Ratings-adjusted debt to EBITDA of at or near 2.0x and S&P Global Ratings-adjusted

...- We believe that the nuclear production tax credits (PTCs), which commence in 2024 and continue through 2032, will further support Constellation Energy Generation LLC's (Constellation; CEG) business risk. - We raised our issuer credit rating (ICR) on the company to '###+' from '###' to reflect the resulting stronger and more-predictable financial risk profile. - CEG has $8.15 billion of on-balance-sheet debt as of September 30, 2023 (not all of which is rated debt as some of it is unrated project financing). - The stable outlook reflects our belief that CEG's PTCs will provide greater visibility into its cashflows. It also reflects our expectation that the company will maintain S&P Global Ratings-adjusted debt to EBITDA of at or near 2.0x and S&P Global Ratings-adjusted funds from operations (FFO) to debt of more than 40%....

Research Update