Fitch cuts Edison, Midwest

Fitch Ratings said it downgraded Edison Mission Energy's long-term issuer default rating to B- from B, senior unsecured debt to CCC with a recovery rating of RR5 from B- with a recovery rating of RR5 and short-term issuer default rating at B.

The agency also said it downgraded Midwest Generation LLC's long-term issuer default rating to B- from B and secured working capital facility to BB- with a recovery rating of RR1 from BB with a recovery rating of RR1. Its short-term issuer default rating was affirmed at B.

The outlook is negative.

The companies' margin expectations remain weak due to meaningfully higher costs from environmental regulations and low power prices, Fitch said.

The ratings also reflect power prices that are significantly below expectations and could lead to further deterioration in Edison Mission's already weak credit profile, the agency said.

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