Research Update: FirstEnergy Corp. Downgraded To 'BB' On About $2 Billion Revolver Borrowing; Company Remains On CreditWatch Negative

On Nov. 23, 2020, FirstEnergy Corp. (FE) and some of its regulated subsidiaries borrowed about $2 billion in the aggregate under its revolving credit facilities, leaving about $1.3 billion of remaining availability. S&P Global Ratings is downgrading FE and its subsidiaries, including the issuer credit rating to 'BB' from 'BB+'. We are affirming our 'BB' issuer credit rating on Allegheny Generating Co. At the same time, we are lowering the senior unsecured rating on FE and FirstEnergy Transmission LLC to 'BB' from 'BB+' based on our '3' recovery ratings, indicating meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. The recovery rating on this debt is capped at '3', consistent with our approach for assigning recovery

...- On Nov. 23, 2020, FirstEnergy Corp. (FE) and some of its regulated subsidiaries borrowed about $2 billion in the aggregate under its revolving credit facilities, leaving about $1.3 billion of remaining availability. - S&P Global Ratings is downgrading FE and its subsidiaries, including the issuer credit rating to '##' from '##+'. We are affirming our '##' issuer credit rating on Allegheny Generating Co. - At the same time, we are lowering the senior unsecured rating on FE and FirstEnergy Transmission LLC to '##' from '##+' based on our '3' recovery ratings, indicating meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. The recovery rating on this debt is capped at '3', consistent with our approach for assigning recovery ratings to unsecured debt issued by '##' category corporate entities because recovery prospects are highly vulnerable to impairment before default by additional debt issuance. We also lowered the senior unsecured issue ratings on American...

Research Update