Research Update: Panoche Energy Center LLC Bond Rating Lowered To 'B' And Remains On CreditWatch Negative After PG&E Co. Rating Action

California-based power project Panoche Energy Center LLC (PEC) sells all of its output to utility Pacific Gas&Electric Co. (PG&E) under a long-term power purchase agreement (PPA). We lowered the ratings on PG&E on Jan. 7, 2019, following the announcement from the board of directors that it is reviewing PG&E's management, finances, governance and structural options. The PG&E ratings remain on CreditWatch with negative implications because of the souring political and regulatory environment and our view of the limited options that the company has to effectively manage its operating, financial, and regulatory risks. Given the complete reliance on PG&E for all its revenues under its power contract, we are lowering our rating on PEC's $321 million senior secured bonds

...+ California-based power project Panoche Energy Center LLC (PEC) sells all of its output to utility Pacific Gas & Electric Co. (PG&E) under a long-term power purchase agreement (PPA). + We lowered the ratings on PG&E on Jan. 7, 2019, following the announcement from the board of directors that it is reviewing PG&E's management, finances, governance and structural options. The PG&E ratings remain on CreditWatch with negative implications because of the souring political and regulatory environment and our view of the limited options that the company has to effectively manage its operating, financial, and regulatory risks. + Given the complete reliance on PG&E for all its revenues under its power contract, we are lowering our rating on PEC's $321 million senior secured bonds due July 31, 2029 to 'B' from '##'. The rating remains on CreditWatch negative. + The CreditWatch Negative listing reflects the possibility that further downgrades on utility PG&E will trigger a change in the rating on...

Research Update