Moody’s revises Panoche to negative

Moody's Investors Service said it affirmed the Baa3 rating on Panoche Energy Center, LLC's senior secured bonds due 2029 and revised the outlook to negative from stable.

Panoche owns an estimated 400MW peaking generating facility (the project) in southern California.

Despite stable financial performance, "the outlook change to negative reflects concerns about whether Panoche will be able to manage its growing deferred liability associated with unmitigated greenhouse gas emission costs in a manner consistent with an investment grade profile. Panoche's free emission allocations are three times lower than the emissions currently emitted by the facility resulting in a growing liability that will likely result in a sizeable drain on cash in 2018," Moody's analyst Charles Berckmann said in a news release.

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