Moody's may upgrade Cleco Evangeline

Moody's Investors Service said it placed the B1 rating of the senior secured bonds of Cleco Evangeline LLC under review for possible upgrade.

The review of Evangeline's rating was prompted by the review for upgrade of The Williams Cos., which guarantees the payments of its subsidiary, Williams Power Co. Inc., under a long-term tolling agreement between Williams Power and Evangeline that expires in 2020. This tolling agreement is the principal source of cash flow for Cleco Evangeline.

The Cleco Evangeline power project has been dispatched less often than had been originally anticipated, the agency said. However, it continues to receive regular capacity payments, which represent the core component of cash flow for debt service and are based upon the plant's average and peak availability target levels.

Given the historical operating performance of the plant, Moody's predicted that Cleco Evangeline will be able to continue to achieve required availability levels and receive associated capacity payments. Evangeline's ability to cover required debt service obligations has remained robust due to the receipt of contracted capacity payments.

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