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U.S. Merchant Power Generators Appear To Have Adequate Liquidity, But Systemic Risks Do Exist
Standard & Poors, Sep 2008
Abstract
In light of the market's loss of confidence in financial counterparties and in Constellation Energy Group Inc. (which has agreed to be acquired by MidAmerican Energy Co.), Standard & Poor's Ratings Services has reviewed the current liquidity positions of leading independent power producers (IPP) in the U.S. This group of companies currently appears to have adequate liquidity to fund their operations. A few observations in this regard, as well as potential risks to liquidity, are discussed below. The companies (see list below) look as if they have enough liquidity. Cash on hand plus available lines of credit are adequate to provide an MCELA (market and credit event liquidity adequacy) ratio of at least 1x at all companies under Standard &...
Companies mentioned in this report are: Edison Mission Energy,Calpine Corp.,MidAmerican Energy Co.,NRG Energy Inc.,Constellation Energy Group Inc.,Dynegy Inc.,Midwest Generation LLC,RRI Energy Inc.,Calpine Construction Finance Co. L.P.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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