S&P downgrades 2 PJM coal-fired power producers on likely default
Ratings lowered on Longview Power, Chief Power
Coal-fired plants include Longview, Keystone, Conemaugh
New York — S&P Global Ratings on February 14 lowered the senior secured ratings of Longview Power LLC and Chief Power Finance LLC as the rating agency believes that the merchant power producers are likely to default in the next six and 12 months, respectively. Outlooks are negative.
Ratings lowered Longview Power’s senior secured debt to CCC- from CCC, with expectations that the project will default within six months due to the company’s weak credit position, along with current market conditions and weak power prices since the agency’s last forecast.
“The CCC- rating reflects our view that lower-than-expected power prices in the [PJM] Interconnection in recent months will leave the project with insufficient liquidity to repay its outstanding revolver balance when it comes due in April 2020,” Ratings wrote in a report.
Longview Power is a project-financed entity which operates the 700-MW Longview Power coal-fired power plant in Monongalia County, West Virginia. which began operating in December 2011. It sells its output into the PJM Interconnection.
Likewise, Ratings also lowered the term loan rating of Chief Power Finance to CCC from CCC+, with expectations that the project will default over the next 12 months.