Moody’s cuts Star West facilities

Moody's Investors Service said it downgraded the senior secured credit facilities of Star West Generation LLC to B2 from B1.

The outlook was revised to stable from negative.

“The downgrade reflects the weak power market fundamentals in the desert southwest and the fact that the Griffith plant will now operate on a merchant basis in the weak power environment over the next two years after the 2017 expiration of its tolling contract,” the agency said in a news release.

“Griffith has executed a new tolling agreement with another counterparty, which should provide a degree of cash flow stability in the future, but it does not start until June 2020, with commercial terms at a lower price than the expired contract.

“Until then, Griffith will operate as a purely merchant generator in a weakened wholesale power environment.”

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