S&P revises FirstEnergy unsecured debt recovery

S&P said it revised the recovery rating on unsecured debt issued by FirstEnergy Solutions Corp., and subsidiaries FirstEnergy Generation Corp. and FirstEnergy Nuclear Generation Corp., to 4 from 3.

The agency also said it affirmed the CCC+ rating on the unsecured debt. The secured debt rating of B and recovery rating of 1 are unchanged.

The outlook is negative.

S&P said it reviewed the recovery and issue-level ratings on FirstEnergy Solutions and on issuances at the subsidiaries that were considered under criteria observation after the agency published revised recovery ratings criteria Dec. 7.

The recovery revision is due to the application of the revised recovery criteria and the change in the priority of the revolver to secured from unsecured, but the revolver is not rated and does not reflect any change in the corporate credit rating on the company, the agency said.

The parent company, FirstEnergy Corp., and its other regulated subsidiaries do not guarantee any of FirstEnergy Solution’s debt or lease liabilities and it is unlikely that there would be a compelling economic reason to provide additional support to the entities if it comes under stress, S&P said.

The agency said it no longer attributes any support from FirstEnergy in the corporate credit rating on the competitive entities and evaluates the recovery prospects on a stand-alone basis.

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