Moody's rates Vistra P-Caps Baa3

Moody's Investors Service said it assigned a Baa3 rating to Palomino Funding Trust I's pre-capitalized trust securities, or P-Caps, due 2028. The Trust will serve as an additional liquidity facility for Vistra Corp.

“The P-Caps have a credit quality on par with Vistra's senior secured notes with fall-away security provisions. The main reason supporting the strong linkage is that if, for any reason, the trust does not have adequate funds to pay interest and principal on the P-Caps, Vistra is contractually required under the facility agreement to either fund the payment obligation itself in the form of a substitute payment or through the delivery of senior secured notes with fall-away provisions to the trust,” Moody’s said in a press release.

The P-Caps are being issued to expand Vistra's capacity to provide trade collateral to commodity exchanges and its trading counterparties.

The trust has a stable outlook.

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