Research Update: Invenergy Thermal Operating I LLC Senior Debt Rating Raised To 'BB' On Cash Sweeps, Low Leverage; Outlook Stable

Invenergy Thermal Operating I LLC (ITOI) swept a total of $37.8 million since the refinancing transaction in August 2023, bringing its term loan B balance to $284.7 million from $325 million. ITOI plans to sweep an additional $29 million-$36 million in the third and fourth quarters of 2024, substantially reducing leverage and refinancing risk in 2029. We believe the reduced leverage and tailwinds in the PJM Interconnection capacity and power markets, where the Nelson and Nelson Expansion (NEX) plant projects operate, should support continued and strong cash flow sweeps in the next 12-24 months. This would lead to a term loan B balance at maturity of about $60 million versus our previous expectation of about $115 million. Based on our

...- Invenergy Thermal Operating I LLC (ITOI) swept a total of $37.8 million since the refinancing transaction in August 2023, bringing its term loan B balance to $284.7 million from $325 million. ITOI plans to sweep an additional $29 million-$36 million in the third and fourth quarters of 2024, substantially reducing leverage and refinancing risk in 2029. - We believe the reduced leverage and tailwinds in the PJM Interconnection capacity and power markets, where the Nelson and Nelson Expansion (NEX) plant projects operate, should support continued and strong cash flow sweeps in the next 12-24 months. This would lead to a term loan B balance at maturity of about $60 million versus our previous expectation of about $115 million. - Based on our view of industry factors and market-driven variables (see our base-case projections), we forecast a minimum debt service coverage ratio (DSCR) of about 2.05x (June 2025) and median DSCR of 3.45x, including the post-refinancing period in which we model...

Research Update