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COMMENTS

Issuer Ranking List: North American Unregulated Power Companies


Issuer Ranking List: North American Unregulated Power Companies

The following list ranks the North American non-utility merchant and contracted power companies that S&P Global Ratings rates, from strongest to weakest.

We rank companies, in turn, by the rating, outlook, stand-alone credit profile (SACP), business and financial risk profiles, and liquidity assessment. Investment-grade companies are ranked by business risk profile, then financial risk profile. Speculative-grade companies are ordered by financial risk profile, then business risk profile. Companies are then listed in alphabetical order, if not distinguished by these factors.

We rank project finance entities, in turn, by rating, outlook, operations phase business assessment (OPBA), preliminary SACP, downside mapping, liquidity, comparable rating assessment, debt structure, and transaction structure. Projects are ordered by rating and outlook and then listed in alphabetical order, if not distinguished by these factors.

In line with our corporate, project finance, and project developer rating methodology, the final rating might differ from the SACP, where government, group, or rating above the sovereign considerations apply. Where the SACP differs from the anchor, we have applied one or more modifiers. We've noted the anchor and active modifiers of each company for informational purposes only. Please refer to the company-specific pages on RatingsDirect via the hyperlinks below.

Given our low industry risk assessment for the power sector, country risk has no material impact on the corporate industry and country risk assessment or final OPBA because the rated companies are based in jurisdictions where we assess country risk as very low.

For our related analysis, please refer to the commentaries listed under Related Research at the end of this article.

Ranking Tables

We publicly rate 26 merchant power projects. All are speculative grade ('BB+' and below), with four projects rated in the 'CCC' or 'CC' category.

Table 1

Merchant Power Project Financings
Issuer Sector Rating Outlook OPBA Preliminary SACP Downside mapping Liquidity CRA Debt structure Transaction structure Analyst

Elwood Energy LLC

Merchant BB+ Positive 8 bbb- bbb (No Impact) Neutral Negative Neutral Neutral Bernhardsdottir, Sunneva

Carroll County Energy LLC

Merchant BB Stable 9 bb bbb (+1 notch) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Iyer, Karthik

CPV Shore Holdings LLC

Merchant BB Stable 10 b+ bbb (+2 notches) Neutral Positive Material reliance on cash flow sweep (-1 notch) Neutral Iyer, Karthik

Edgewater Generation LLC

Merchant BB Stable 10 bb bbb (+1 notch) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Mok S, Tony

Frontera Generation Holdings LLC

Merchant BB Negative 9 bb- bbb (+1 notch) Neutral Positive Material reliance on cash flow sweep (-1 notch) Neutral Yarborough E, Kimberly

Astoria Energy LLC

Merchant BB- Stable 10 bb- bbb (+1 notch) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Mok S, Tony

Compass Power Generation LLC

Merchant BB- Stable 8 b+ bbb (+2 notches) Neutral Positive Material reliance on cash flow sweep (-1 notch) -1 Notch Weisvein, Diego

Eastern Power LLC

Merchant BB- Stable 6 b+ bb (+1 notch) Neutral Positive Material reliance on cash flow sweep (-1 notch) Neutral Yarborough E, Kimberly

EFS Cogen Holdings I LLC

Merchant BB- Stable 10 b+ bbb (+2 notches) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Weisvein, Diego

Helix Gen Funding LLC

Merchant BB- Negative 10 b+ bbb (+2 notches) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Yarborough E, Kimberly

Lightstone Holdco LLC

Merchant BB- Stable 9 b+ bbb (+2 notches) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Yarborough E, Kimberly

LMBE-MC Holdco II LLC

Merchant BB- Stable 10 b+ bbb (+2 notches) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Weisvein, Diego

Oregon Clean Energy LLC

Merchant BB- Stable 10 bb- bb (No Impact) Neutral Positive Material reliance on cash flow sweep (-1 notch) Neutral Bernhardsdottir, Sunneva

Panda Stonewall LLC

Merchant BB- Stable 10 b+ bb (+1 notch) Neutral Neutral Neutral Neutral Starrett, Jason

Revere Power LLC

Merchant BB- Stable 10 b+ bb (+1 notch) Neutral Positive Material reliance on cash flow sweep (-1 notch) Neutral Starrett, Jason

St. Joseph Energy Center LLC

Merchant BB- Stable 9 b+ bbb (+2 notches) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Weisvein, Diego

West Deptford Energy Holding LLC

Merchant BB- Stable 10 bb- bbb (+1 notch) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Banks R, Jacqueline

Heritage Power LLC

Merchant B+ Stable 10 b+ b (No Impact) Neutral Neutral Neutral Neutral Pastrich, Michael

Kestrel Acquisition LLC

Merchant B+ Stable 10 b+ bb (+1 notch) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Starrett, Jason

Lonestar II Generation Holding LLC

Merchant B+ Stable 11 b+ b (No Impact) Neutral Neutral Neutral Neutral Shvetsov, Alexander

Nautilus Power LLC

Merchant B+ Stable 7 b+ b (No Impact) Neutral Neutral Neutral Neutral Weisvein, Diego

Panda Hummel Station LLC

Merchant B Negative 10 b- b (No Impact) Less than adequate Positive Neutral Neutral Shvetsov, Alexander

Panda Liberty LLC

Merchant CCC Developing CCC Criteria ccc -- Less than adequate Neutral Neutral Neutral Mok S, Tony

Panda Patriot LLC

Merchant CCC Developing CCC Criteria ccc -- Less than adequate Neutral Neutral Neutral Mok S, Tony

Chief Power Finance LLC

Merchant CCC Negative CCC Criteria ccc -- Less than adequate Neutral Neutral Neutral Starrett, Jason

Longview Power LLC

Merchant CC Negative CCC Criteria ccc- -- Less than adequate Neutral Neutral Neutral Starrett, Jason
*We do not subtract a notch for material reliance on a cash flow sweep for projects with a preliminary SACP in the 'b' category. CRA--Comparable ratings assessment.

We publicly rate 29 contracted or partially contracted power projects, of which 59% are investment grade ('BBB-' and above) and the remaining 41% speculative grade ('BB+' and below). Four projects are rated in the 'CCC' category.

Table 2

Contracted Power Project Financings
Issuer Sector Rating Outlook OPBA Preliminary SACP Downside mapping Liquidity CRA Debt structure Transaction structure Analyst

Indiantown Cogeneration L.P.

Contracted A Stable 8 a- aa (+1 notch) Neutral Neutral Neutral Neutral Bettinelli L, Antonio

Kiowa Power Partners LLC

Contracted A- Positive 5 bbb+ a (+1 notch) Neutral Neutral Neutral Neutral Feder, Benjamin

CSolar IV South LLC

Contracted BBB+ Stable 3 bbb a (+1 notch) Neutral Neutral Neutral Neutral Li, Quansheng

Mackinaw Power LLC

Contracted BBB+ Stable 4 a- aa (+1 notch) Neutral Neutral Neutral Neutral Kovacic, Boyan

Orange Cogen Funding Corp.

Contracted BBB+ Stable 8 a- aa (+1 notch) Neutral Neutral Neutral Counterparty ‘BBB+’ cap Feder, Benjamin

Tenaska Georgia Partners L.P.

Contracted BBB+ Stable 4 a- a (No impact) Neutral Neutral Neutral Counterparty ‘BBB+’ cap Feder, Benjamin

UMH Energy Partnership

Contracted BBB+ Negative 4 a- a (No impact) Neutral Neutral Neutral Neutral Bernhardsdottir, Sunneva

Chambers Cogeneration Ltd. Partnership

Contracted BBB Stable 5 bbb aa (+2 notches) Neutral Neutral Neutral -1 notch Feder, Benjamin

Continental Wind LLC

Contracted BBB Stable 5 bbb- b (No impact) Neutral Positive Neutral Neutral Feder, Benjamin

Solar Star Funding LLC

Contracted BBB Stable 3 bbb+ a (+1 notch) Neutral Negative Neutral Counterparty ‘BBB’ cap Bettinelli L, Antonio

Tenaska Alabama II Partners L.P.

Contracted BBB Stable 5 bb+ a (+2 notches) Neutral Neutral Neutral Neutral Arora, Anubhav

Tenaska Virginia Partners L.P.

Contracted BBB Stable 5 bbb- a (+1 notch) Neutral Neutral Neutral Neutral Arora, Anubhav

Yellowstone Energy LP

Contracted BBB Stable 8 bb+ a (+2 notches) Neutral Neutral Neutral Neutral Kovacic, Boyan

Alta Wind Holdings LLC

Contracted BBB- Stable 6 bbb- bbb (No impact) Neutral Neutral Neutral Neutral Kovacic, Boyan

Logan Generating Company, L.P.

Contracted BBB- Stable 5 bbb- a (+2 notches) Neutral Neutral Back-ended Debt Structure (-1 notch) -1 notch Lum, David

Tenaska Gateway Partners Ltd.

Contracted BBB- Stable 5 bb a (+2 notches) Neutral Neutral Neutral Neutral Feder, Benjamin

Lea Power Partners LLC

Contracted BBB- Negative 5 bb bbb (+1 notch) Neutral Positive Neutral Neutral Kovacic, Boyan

Midland Cogeneration Venture L.P.

Contracted BB+ Negative 5 bb bbb (+1 notch) Neutral Neutral Neutral Neutral Kovacic, Boyan

Invenergy Thermal Operating I LLC

Partially contracted BB Stable 8 bbb bbb (No impact) Neutral Neutral Material reliance on cash flow sweep (-2 notches) -1 Notch Kovacic, Boyan

WG Partners Acquisition LLC

Partially contracted BB Stable 6 bb- bbb (+1 notch) Neutral Neutral Material reliance on cash flow sweep (-1 notch) Neutral Kovacic, Boyan

Recurve Energy Asset Management (StarWest Generation LLC)

Partially contracted BB- Stable 10 b bbb (+2 notches) Neutral Neutral Neutral Neutral Kovacic, Boyan

EIF Channelview Cogeneration LLC

Partially contracted B+ Stable 10 b- bbb (+2 notches) Neutral Neutral Neutral Neutral Kovacic, Boyan

Southeast PowerGen LLC

Partially contracted B Stable 10 b b (No impact) Neutral Neutral Neutral Neutral Kovacic, Boyan

Green Country Energy LLC

Contracted B Negative 5 b- b (No impact) Less than Adequate Positive Neutral Neutral Kovacic, Boyan

Borger Energy Associates L.P./Borger Funding Corp.

Contracted B- Stable 7 b- b (No impact) Neutral Neutral Neutral Neutral Kovacic, Boyan

Crockett Cogeneration, A California L.P.

Contracted CCC+ Developing CCC Criteria ccc+ -- Neutral Neutral Neutral Neutral Kovacic, Boyan

Panoche Energy Center LLC

Contracted CCC+ Developing CCC Criteria ccc+ -- Neutral Neutral Neutral Neutral Kovacic, Boyan

Topaz Solar Farms LLC

Contracted CCC+ Developing CCC Criteria ccc+ -- Neutral Negative Neutral Neutral Bettinelli L, Antonio

Sandy Creek Energy Associates L.P.

Partially contracted CCC Negative CCC Criteria ccc -- Less than adequate Neutral Neutral Neutral Starrett, Jason
*We do not subtract a notch for material reliance on a cash flow sweep for projects with a preliminary SACP in the 'b' category. CRA--Comparable ratings assessment.

With respect to project financings, the debt structure adjustment affects 19 companies across both the merchant and contracted sectors (35%). This adjustment affects merchant power projects (61% of the merchant portfolio) to a greater degree than the contracted projects (10% of the contracted portfolio). Group ownership is not relevant because we assess most projects as de-linked from sponsors. Transaction structure has a negative impact in about 4% of projects (two out of 55).

We publicly rate 15 corporate merchant power companies, of which 27% are investment grade ('BBB-' and above) and the remaining 73% speculative grade ('BB+' and below).

Table 3

Corporate Power Companies
Issuer FC LT Outlook SACP Business risk Financial risk Liquidity Anchor Modifiers Analyst

Exelon Generation Co. LLC

BBB+ Stable bbb Satisfactory Intermediate Adequate bbb GRM: +1 Prabhu, CFA, FRM, Aneesh

PSEG Power LLC

BBB+ Stable bbb Satisfactory Intermediate Adequate bbb GRM: +1 Pastrich, Michael

Bruce Power L.P.

BBB Negative bbb Satisfactory Significant Adequate bbb- CRA: Positive Gosselin, Viviane

Capital Power Corp.

BBB- Stable bbb- Strong Aggressive Adequate bb+ CRA: Positive Gosselin, Viviane

TransAlta Corp.

BB+ Stable bb+ Satisfactory Aggressive Adequate bb CRA: Positive Gosselin, Viviane

NRG Energy Inc.

BB Positive bb Fair Significant Adequate bb Prabhu, CFA, FRM, Aneesh

Vistra Energy Corp.

BB Positive bb Fair Significant Adequate bb Prabhu, CFA, FRM, Aneesh

NSG Holdings LLC

BB Stable bb Satisfactory Aggressive Adequate bb Bernhardsdottir, Sunneva

Atlantic Power Corp.

BB- Stable bb- Fair Aggressive Adequate bb- Iyer, Karthik

Covanta Holding Corp.

B+ Stable b+ Satisfactory Highly leveraged Adequate b+ Starrett, Jason

Granite Generation LLC

B+ Stable b+ Weak Aggressive Adequate b+ Mok, Tony

Calpine Corp.

B+ Positive b+ Fair Highly leveraged Adequate b CRA: Positive Prabhu, CFA, FRM, Aneesh

Granite Acquisition Inc.

B+ Positive b+ Fair Highly leveraged Less than adequate b CRA: Positive Weisvein, Diego

Talen Energy Supply LLC

B Negative b Fair Highly leveraged Adequate b Yarborough E, Kimberly

Terra-Gen Finance Co. LLC

B- Negative b- Vulnerable Highly leveraged Adequate b- Iyer, Karthik
Source: S&P Global Ratings. FC LT--Foreign currency long term. CRA--Comparable ratings assessment. GRM--Group rating methodology.

We publicly rate 11 contracted or partially contracted project developers, of which 27% are investment grade ('BBB-' and above) and the remaining 73% speculative grade ('BB+' and below).

Table 4

Project Developers
Issuer FC LT Outlook SACP Business risk Financial risk Liquidity Anchor Modifiers Analyst

Brookfield Renewable Partners L.P.

BBB+ Stable bbb Satisfactory Significant Strong bbb- CRA: Positive, GRM: +1 Bernhardsdottir, Sunneva

Northland Power Inc.

BBB Stable bbb Satisfactory Intermediate Adequate bbb Ali, CFA, Luqman

Innergex Renewable Energy Inc.

BBB- Negative bbb- Satisfactory Significant Adequate bbb- Ali, CFA, Luqman

The AES Corp.

BB+ Positive bb+ Satisfactory Significant Adequate bb+ Mok S, Tony

Atlantica Yield PLC

BB Positive bb Satisfactory Significant Adequate bb+ CRA: negative Yarborough E, Kimberly

NextEra Energy Partners L.P.

BB Stable bb Satisfactory Aggressive Adequate bb Yarborough E, Kimberly

Clearway Energy Inc.

BB Negative bb Satisfactory Aggressive Adequate bb Pastrich, Michael

Pattern Energy Operations L.P.

BB- Stable bb- Fair Aggressive Adequate bb- Iyer, Karthik

TerraForm Global Inc.

BB- Stable b+ Fair Aggressive Adequate bb- CRA: negative Ali, CFA, Luqman

TerraForm Power Inc.

BB- Stable b+ Fair Highly leveraged Adequate b CRA: positive Ali, CFA, Luqman

ExGen Renewables IV LLC

B Developing b Fair Highly leveraged Adequate b Financial policy: positive (+1 notch); CRA:negative Yarborough E, Kimberly
Source: S&P Global Ratings. FC LT--Foreign currency long term.

The table and charts in this publication provide an overview of the 81 entities we rate in this industry. We rate 24 as investment grade ('BBB-' and above) and 57 as speculative grade ('BB+' and below).

Chart 1

image

Outlook and CreditWatch distribution

Our rating outlooks within the sector are mostly stable. Our ratings are underpinned by our base case assumptions, but also generally factor in some headroom for short-term volatility related to fluctuations in weather-driven power demand and the current uncertainty around the Pennsylvania-Jersey-Maryland capacity auction.

Chart 2

image

Liquidity

Liquidity is adequate or neutral for 90% of our merchant and contracted power ratings. Most power projects have forward-looking debt service reserve accounts of at least six months and corporate issuers generally have ample liquidity available under revolving credit facilities. The less than adequate liquidity assessments are for those entities that have near-term maturities and are rated in the 'CCC' category.

Chart 3

image

Related Research

  • $2.5 Billion Near-Term Maturity Wall Drags Merchant Power and All Stand-Alone Coal Ratings To 'CCC' Category, Feb. 24, 2020
  • ESG Industry Report Card: Power Generation, Feb. 11, 2020
  • How ESG Factors Have Begun To Influence Our Project Finance Rating Outcomes, Jan. 27 2020

This report does not constitute a rating action.

Primary Credit Analysts:Kimberly E Yarborough, New York (1) 212-438-1089;
kimberly.yarborough@spglobal.com
Aneesh Prabhu, CFA, FRM, New York (1) 212-438-1285;
aneesh.prabhu@spglobal.com
Research Assistants:Kyle Thumar, New York
Steven E Cox, New York
Additional Contacts:Luqman Ali, CFA, Toronto (1) 416-507-2589;
luqman.ali@spglobal.com
Anubhav Arora, Toronto + 1 (416) 507 3219;
anubhav.arora@spglobal.com
Sunneva Bernhardsdottir, Toronto + 416 507 3258;
sunneva.b@spglobal.com
Antonio L Bettinelli, San Francisco (1) 415-371-5067;
tony.bettinelli@spglobal.com
Benjamin Feder, New York + 212 438 1796;
benjamin.feder@spglobal.com
Viviane Gosselin, Toronto + 1 (416) 507 2542;
viviane.gosselin@spglobal.com
Karthik Iyer, New York (1) 212-438-1800;
karthik.iyer@spglobal.com
Boyan Kovacic, San Francisco + 1 (415) 371 5082;
boyan.kovacic@spglobal.com
Quansheng Li, San Francisco + 1 (415) 371 5088;
quansheng.li@spglobal.com
David L Lum, San Francisco + 1 (415) 371 5013;
david.lum@spglobal.com
Tony S Mok, New York + 1 (212) 438 0113;
tony.mok@spglobal.com
Michael Pastrich, New York + 1 (212) 438 0604;
michael.pastrich@spglobal.com
Alexander Shvetsov, New York + 1 212-438-1339;
alexander.shvetsov@spglobal.com
Jason Starrett, New York (1) 212-438-2127;
jason.starrett@spglobal.com
Diego Weisvein, New York (1) 212-438-0523;
diego.weisvein@spglobal.com

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