S&P affirms Cleco

S&P said it affirmed its ratings on Cleco Corp., including the BBB- issuer credit rating.

At the same time, the agency affirmed the BBB+ issuer credit rating on subsidiary Cleco Power LLC.

The outlooks remain stable.

Cleco announced that it will acquire South Central Generating LLC for about $1 billion.

The agency said the company’s acquisition of a mostly contracted merchant generation portfolio materially weakens its business risk profile and results in a reassessment of the business risk profile to satisfactory from excellent to reflect the company's increased exposure to counterparty credit, volumetric, commodity and additional operational risks.

However, S&P said it expects Cleco’s regulated utility operations to account for about 75% of consolidated EBITDA and the mostly contracted merchant business to contribute the remaining 25%.

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