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U.S. Merchant Power Sector's Near-Term Economic Prospects Overshadow Longer-Term Environmental Upside Oct 11
Standard & Poors, Oct 2011
Abstract
Standard & Poor's Ratings Services' 2012 outlook for the U.S. merchant power and independent power producers (IPP) sector is negative. As the economy stumbles along, weather-adjusted demand for electricity has declined nationally year-to-date. We are somewhat concerned that demand could suffer and the capital markets could become less accessible to these issuers due to the increasing prospects of a double-dip recession. While investment-grade diversified energy companies are somewhat insulated from market forces because they hedge their expected generation, issuers in the speculative-grade categories could witness rating movements, in our view. We note that a number of speculative-grade IPPs already have negative outlooks. At Standard & Poor's, we publish monthly our economists' scenario of where we think the U.S. economy could...
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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