Moody's upgrades Talen Energy notes

Moody's Investors Service said it upgraded about $240 million of previously unguaranteed senior unsecured notes of Talen Energy Supply, LLC to B3 from Caa1, reflecting their newly guaranteed status.

The upgrade follows Talen's extension of its guarantee package to all of its senior unsecured debt obligations, the agency explained.

Moody's also said it affirmed Talen's corporate family rating at B2, probability of default rating at B2-PD, senior secured debt at Ba3, other senior unsecured guaranteed debt at B3 and speculative grade liquidity rating at SGL-2.

The outlook is stable.

The company's ratings are driven by the inherent volatility of the merchant power markets in which it operates and its relatively leveraged capital structure, Moody's said.

The ratings also consider Talen's elevated exposure to carbon transition risks, resulting from its heavy reliance on unregulated fossil-fired generation, the agency said.

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