Moody's Investors Service said it downgraded the senior secured rating of $83.3 million of county of Ohio, Ky., pollution control refunding revenue bonds (Big Rivers Electric Corporation Project; cusip number 677288AG7) to Ba2 from Ba1, concluding the review for downgrade which commenced on February 6.
The rating outlook is negative.
"The downgrade of the rating for the pollution control refunding revenue bonds previously issued by the county on behalf of Big Rivers Electric Corporation (BREC) reflects heightened credit risk for BREC as it moves closer to the dates when it will need to be more dependent on rate increases and other mitigation strategies to compensate for the anticipated significant loss of load from two aluminum smelters" said Kevin Rose, Vice President-Senior Analyst. "Moody's expects depressed margins for off-system sales in the MISO market to persist, thus limiting the effectiveness of marketing excess power as part of BREC's load concentration mitigation strategy", Rose added.
