Delaware Municipal Electric Corporation -- Moody's announces completion of a periodic review of ratings of Delaware Municipal Electric Corporation - Beasley Project
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Delaware Municipal Electric Corporation - Beasley ProjectGlobal Credit Research - 21 Jan 2022New York, January 21, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Delaware Municipal Electric Corporation - Beasley Project and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on 18 January 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.Key rating considerations are summarized below.Delaware Municipal Electric Corporation (DEMEC) Beasley Project's A1 rating reflects Beasley's strong financial performance due to the incremental revenues and cash flow it receives from the PJM capacity auction that complements the stable cash flow received from its seven participants that jointly have a mid-A weighted average credit quality. Over the past three years (2018-2020), Beasley's fixed obligation charge coverage (FOCC) ratio has averaged almost 4.0x, and liquidity restricted to the project continues to be robust at 1,851 days cash on hand in 2020. The legal framework includes a standard 25% step-up provision, which is still insufficient to cover a possible default by its largest participant, the city of Newark (Aa2), a remote risk that is mitigated by the city's strong credit quality.This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.The principal methodology used for this review was US Municipal Joint Action Agencies Methodology published in August 2020. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.This announcement applies only to EU rated, UK rated, EU endorsed and UK endorsed ratings. Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 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