Research Update: ExGen Renewables IV LLC Ratings Off CreditWatch Negative; Outlook Developing; AVSR Contract With PG&E At Issue

ExGen Renewables IV LLC (EGR IV) receives about 40% of its cash flows from Pacific Gas&Electric Co. (PG&E) via its ownership of AV Solar Ranch (AVSR). AVSR's upstream distributions remain trapped at the asset level because of PG&E's bankruptcy filing that triggered a technical default under its loan guarantee document with Department of Energy (DOE). We removed EGR IV's rating from Credit Watch with negative implications, affirmed our 'B' rating, and assigned a developing outlook to the company. The revision reflects that PG&E's bankruptcy plan, filed Sept. 9, 2019, does not propose to modify the terms of its existing PPAs, including AV Solar Ranch's (AVSR). PG&E indicated in the reorganization plan that all purchase power agreements shall be

...- ExGen Renewables IV LLC (EGR IV) receives about 40% of its cash flows from Pacific Gas & Electric Co. (PG&E) via its ownership of AV Solar Ranch (AVSR). AVSR's upstream distributions remain trapped at the asset level because of PG&E's bankruptcy filing that triggered a technical default under its loan guarantee document with Department of Energy (DOE). - We removed EGR IV's rating from Credit Watch with negative implications, affirmed our 'B' rating, and assigned a developing outlook to the company. - The revision reflects that PG&E's bankruptcy plan, filed Sept. 9, 2019, does not propose to modify the terms of its existing PPAs, including AV Solar Ranch's (AVSR). PG&E indicated in the reorganization plan that all purchase power agreements shall be deemed assumed. If this stance continues and the plan is approved, we could upgrade our rating on EGR IV when PG&E emerges from bankruptcy. An upgrade could result if the AVSR power purchase contract survives the bankruptcy process unchanged,...

Research Update