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Industry Economic And Ratings Outlook: A Stable Industry Outlook For The U.S. Merchant Power Sector Supports Ratings Apr 11
Standard & Poors, April 2011
Abstract
The year ahead is looking stable overall for the U.S. merchant power, although some credits in the speculative grade could face downgrades. As the economy slowly improves, demand for electricity is rising. Commodity prices are also leveling off, and the capital markets have been open to these issuers. Standard & Poor's Ratings Services' base-case 2011 outlook for the U.S. merchant power and independent IPP sector is stable, based on the fundamentals outlined above. Merchant power is essentially a 'price-taking' business (in which it accepts market prices as its own), which is why we positively view a company's decision to hedge future production when power prices adequately cover all fixed obligations. Many merchant power companies entered the downturn in 2008 with...
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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