Research Update: Exelon Generation Co. LLC 'BBB-' Issuer Credit Rating Affirmed, Outlook Positive

Generation supply subsidiary Exelon Generation Co. LLC (ExGen) is being spun off by parent Exelon Corp. as Constellation Energy Generation, LLC, which will be a subsidiary of Constellation Energy Co. We have concluded our review of its business and financial plan. We still view ExGen's business risk profile (BRP) as satisfactory, but improving, because of a higher proportion of contracted revenue in its cash flow profile. We see financial measures improving meaningfully as we expect the company to pay down debt that matures in 2022. We also expect additional discretionary repayments. We now expect financial measures to be on the higher end of the range for the rated level. As a result, we affirmed our 'BBB-' issuer credit rating on

...- Generation supply subsidiary Exelon Generation Co. LLC (ExGen) is being spun off by parent Exelon Corp. as Constellation Energy Generation, LLC, which will be a subsidiary of Constellation Energy Co. We have concluded our review of its business and financial plan. - We still view ExGen's business risk profile (BRP) as satisfactory, but improving, because of a higher proportion of contracted revenue in its cash flow profile. - We see financial measures improving meaningfully as we expect the company to pay down debt that matures in 2022. We also expect additional discretionary repayments. We now expect financial measures to be on the higher end of the range for the rated level. - As a result, we affirmed our '###-' issuer credit rating on ExGen. The outlook is positive. - The positive outlook factors in adjusted funds from operations (FFO) to debt at, or above, 37.5% on a sustained basis through 2024. Similarly, we expect adjusted debt to EBITDA below 2.5x on a sustained basis through...

Research Update