S&P cuts ComEd

S&P said it downgraded the issuer credit rating on Commonwealth Edison Co. by one notch to BBB+ from A-. S&P also lowered the rating on ComEd’s preferred stock to BBB- from BBB and affirmed the rating on ComEd’s senior secured debt.

“The rating downgrade on ComEd reflects the company’s lack of sufficient internal controls over a sustained period,” S&P said in a press release.

The U.S. Attorney’s Office for the Northern District of Illinois (USND) filed a bribery charge against ComEd. ComEd admitted it gave jobs and vendors subcontracts for the benefit of public officials and agreed to pay the U.S. Treasury $200 million under a deferred prosecution agreement. The $200 million cannot be recouped from customers.

S&P also revised the outlook for ComEd, its parent Exelon Corp. as well as PECO Energy Co., Pepco Holdings LLC and Exelon Generation Co. LLC to negative from stable.

“The revised outlook reflects consolidated Exelon’s minimal financial cushion for our current rating and the USND’s filing of a bribery charge against Exelon Corp.’s subsidiary ComEd that we believe could lead to increased business risk,” S&P said.

Except for ComEd, S&P affirmed its ratings for Exelon and its subsidiaries.

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