S&P lowers Eastern Power

S&P said it cut its senior secured rating on Eastern Power LLC to B from BB- and removed the rating from CreditWatch, where it was placed with negative implications on Feb. 15. The recovery rating remains 3, indicating expectations for meaningful recovery (30%-50%; rounded estimate: 50%) in default.

“We recently lowered our forecast for future capacity prices in both NYISO Zone J and PJM RTO and ComEd. These new price assumptions result in a forecasted loss of roughly $900 million of cumulative gross margin from 2022 to 2037, relative to our last review. As a pure capacity play, Eastern lacks any significant contributions from energy margin in its portfolio, which might otherwise help offset the impact of lower capacity prices,” the agency said in a press release.

S&P said it sees lower cash flows than it had previously forecasted for Eastern.

The outlook is stable.

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