This year through September, Invenergy Thermal Operating I LLC's merchant assets materially underperformed given lower-than-expected capacity factors at Nelson (a combined-cycle generation unit in PJM) and the absence of scarcity pricing at Ector (a peaker unit in ERCOT). We are lowering our $340 million term loan B ($329 million outstanding) and $70 million working capital facility ratings on Invenergy to 'B' from 'B+'. The outlook is stable. We are revising the recovery rating on the debt to '2' from '1'. The stable outlook reflects our revised forecast that performance at Ector and Nelson will remain weaker than our expectation over the next two to three years. However, stable cash flows from the contracted assets will continue to support debt service.
