Research Update: ExGen Renewables IV LLC Rating, Secured Debt Ratings Lowered To 'B'; Ratings Remain On CreditWatch Negative

S&P Global Ratings is lowering its issuer credit rating on ExGen Renewables IV LLC (EGR IV) to 'B' from 'BB'. We are lowering the senior secured debt rating to 'B' from 'BB+', and revising the recovery rating to '3' (rounded estimate: 55%) from '2' (rounded estimate: 70%), reflecting a revision to our view of the likely path to default. The ratings remain on CreditWatch with negative implications. The downgrade reflects that since we placed the ratings on EGR IV on CreditWatch on Jan. 11, 2019, the credit quality of utility Pacific Gas&Electric Co. (PG&E) continued to deteriorate. On Jan. 16, 2019, we lowered the rating on the utility to ?D?, on missing its interest payment reflecting the company's

...+ S&P Global Ratings is lowering its issuer credit rating on ExGen Renewables IV LLC (EGR IV) to 'B' from '##'. We are lowering the senior secured debt rating to 'B' from '##+', and revising the recovery rating to '3' (rounded estimate: 55%) from '2' (rounded estimate: 70%), reflecting a revision to our view of the likely path to default. The ratings remain on CreditWatch with negative implications. + The downgrade reflects that since we placed the ratings on EGR IV on CreditWatch on Jan. 11, 2019, the credit quality of utility Pacific Gas & Electric Co. (PG&E) continued to deteriorate. On Jan. 16, 2019, we lowered the rating on the utility to `D', on missing its interest payment reflecting the company's announcement that it intends to file for bankruptcy by the end of January. The utility provides EGR IV with about 40%-45% of its cash flows via EGR IV's ownership of AV Solar Ranch (AVSR). + There is uncertainty as to whether PG&E may look to reject or renegotiate its renewable power purchase...

Research Update