Fitch Ratings expects no immediate change in FirstEnergy Corporation's ratings.
New York: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, expects no immediate change in FirstEnergy Corporation's (FE) ratings from FirstEnergy Solutions Corporation's (FES) March 31, 2018 filing for protection under the U.S. Bankruptcy Code.
The bankruptcy filing by FES was widely anticipated and is consistent with FE's strategic pivot away from its commodity sensitive businesses to focus on regulated electric utility and transmission operations. Fitch believes FE's potential exposure to greater than expected clawbacks associated with a contentious FES bankruptcy proceeding is a key near-to-intermediate credit concern, albeit manageable within FE's current rating category.
Fitch in its analysis has assumed $1.5 billion of potential restructuring-related clawbacks in a contentious bankruptcy scenario for FES. FE's restructuring working group is participating in negotiations with a creditor group representing a majority of FES debt outstanding to achieve a mutually acceptable settlement in the restructuring.
Allegheny Energy Supply (Supply) is not included in FES and its subsidiaries' bankruptcy filing and Supply's ratings are unaffected by FES's restructuring in bankruptcy. Supply has announced plans to deactivate or sell the 1,300-MW Pleasants coal-fired generating facility by the end of 2018. The sale of Supply's 713-MW Bath County pumped storage facility is expected to be finalized by the end of the second quarter 2018.
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|Publication:||Daily the Pak Banker (Lahore, Pakistan)|
|Date:||Jun 15, 2018|
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