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Moody's cuts DTE Energy to junk
Moody's Investors Service said it downgraded the rating on DTE Energy Center LLC's bonds to Ba1 from Baa3.
The rating remains under review for possible further downgrade.
The agency said the downgrade reflects the increased risk to bondholders resulting from the precarious state of Chrysler, the parent of the project's sole customer, notwithstanding the guarantee from Daimler North America Holding Corp. of Chrysler's obligations.
The continuing review will consider the impact on the project's rating if Chrysler announces plans to shut down any of the facilities at which the project assets are located and/or if it is forced to seek bankruptcy protection, which Moody's currently estimates to have 70% probability of occurring even if additional assistance from the government is forthcoming. The agency said a bankruptcy filing by Chrysler could occur before the end of this month, at which time the loan from the government is scheduled to mature.
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