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Allegheny Energy Supply Co. LLC Jun 10
Standard & Poors, June 2010
Abstract
Scaled transition through higher capped prices to market rates in 2011; Low-cost, base-load generation assets; Improved operational performance; Successful reduction in operating and maintenance costs; and Significantly improved liability profile from extension of maturities and deleveraging. Steep backwardation in EBITDA profile for 2012-2013; Net revenue erosion due to declining natural gas prices-- the forward power curve has flattened meaningfully and is compounded by compression in dark spreads; Significantly lower-than-expected capacity prices in RPM auctions in the Allegheny zone; Large exposure to stricter environmental standards, especially relating to carbon emissions; and Need for an operational credibility. The 'BBB-' corporate credit ratings on Allegheny Energy Supply LLC (Allegheny Supply) factor the merger proposal between FirstEnergy Corp. and Allegheny Supply's parent, Allegheny Energy...
Companies mentioned in this report are: Allegheny Energy Supply Co. LLC,Allegheny Energy Inc.,Monongahela Power Co.,Potomac Edison Co.,West Penn Power Co.,Allegheny Generating Co.,Trans-Allegheny Interstate Line Co.
Action: Review
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: Full Analysis
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