Fitch cuts Homer City bonds

Fitch Ratings said it downgraded Homer City Funding, LLC's $300 million and $530 million of pass-through bonds to BB- from BB.

The outlook is negative.

The downgrade is due to ongoing challenges at the project as a merchant coal facility in a low gas environment as well as the increasing costs associated with environmental emissions allowances, the agency said.

The negative outlook reflects the uncertainty regarding the magnitude of new emissions restrictions recently placed on Homer City, the agency added.

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