Research Update: Nautilus Power LLC Debt Rating Lowered To 'B' From 'B+' On Revised Capacity Prices; Outlook Negative

On Feb. 15, 2022, S&P Global Ratings lowered its future capacity price assumptions for various power markets, particularly the Pennsylvania-New Jersey-Maryland Interconnection (PJM). In light of the revision, we now forecast lower capacity-based cash flows from the project. We lowered our rating on Nautilus Power LLC's (Nautilus') senior secured debt to 'B' from 'B+' and removed the rating from CreditWatch, where we placed it with negative implications on Feb. 16, 2022. The recovery rating is unchanged at '3', indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 65%) The negative outlook reflects financial underperformance risk if the project is unable to capitalize on the currently favorable energy market conditions. We could also lower our rating if we view Nautilus' liquidity

...- On Feb. 15, 2022, S&P Global Ratings lowered its future capacity price assumptions for various power markets, particularly the Pennsylvania-New Jersey-Maryland Interconnection (PJM). - In light of the revision, we now forecast lower capacity-based cash flows from the project. - We lowered our rating on Nautilus Power LLC's (Nautilus') senior secured debt to 'B' from 'B+' and removed the rating from CreditWatch, where we placed it with negative implications on Feb. 16, 2022. The recovery rating is unchanged at '3', indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 65%) - The negative outlook reflects financial underperformance risk if the project is unable to capitalize on the currently favorable energy market conditions. We could also lower our rating if we view Nautilus' liquidity as becoming constrained, which could result from the project not being able to extend its revolving credit facility (RCF) due May 2023....

Research Update