Moody's trims Parkway Generation

Moody's Investors Service said it downgraded Parkway Generation, LLC's senior secured credit facilities to B1 from Ba3. The facilities consist of a $1.075 billion term loan B due in 2029, a $140 million term loan C due in 2029 and a $100 million revolving credit facility due in 2027.

Concurrently, the agency said it changed the outlook to stable from ratings under review and ended the review it started on March 17.

“Today's ratings action reflects weaker-than-anticipated financial performance in 2023 and 2024 owing to significant capacity performance (CP) penalties prompted by Parkway's fleet partial unavailability during the unprecedented winter storm that hit much of PJM's service territory from Dec. 23 to Dec. 26, 2022 (Winter Storm Elliott).

“During April 2023, Parkway received a final invoice from PJM, which indicated $141 million of net CP penalty payments ($151 million in CP penalty payments offset by $10 million in bonus awards), higher than management's initial assessment of $100 million penalty payment. The latter amount assumes certain penalty reliefs, as Parkway has filed two separate claims with FERC against PJM appealing the penalty. Parkway expects to fully pay its net CP penalties throughout 2023,” Moody’s said in a press release.

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