Moody's rates Panoche bonds Baa3

Moody's Investors Service said it assigned a Baa3 rating to Panoche Energy Center LLC's proposed $330 million senior secured bonds due 2029.

The outlook is stable.

Proceeds will help finance the construction of the company's project and repay development costs.

Moody's said the Baa3 rating reflects robust financial metrics, regulatory support and rationale for the project by the California Public Utility Commission and solid project economics derived under a 20-year Power Purchase and Sale Agreement with Pacific Gas & Electric Co.

The rating also reflects the project's use of a relatively new combustion turbine technology with limited fleet operating experience and construction challenges associated with a greenfield project, according to the agency.

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