Moody's lifts Topaz Solar Farms' rating after PG&E's bankruptcy exit

Moody's Investors Service (Moody's) on Wednesday raised the rating on the senior secured bonds of Topaz Solar Farms LLC, which holds a 550-MW photovoltaic (PV) plant in California, to Ba2 from B3 in light of the recent bankruptcy exit for Pacific Gas & Electric Company (PG&E).

The Californian utility is the one buying the entire output of the thin-film solar park under a long-term power purchase agreement (PPA).

The rating upgrade follows a review that started in June and relates to about USD 856 million (EUR 755.7m) in debt securities. The project's outlook has been revised to "stable".

With PG&E and its parent PG&E Corporation (NYSE:PCG) emerging from bankruptcy at the beginning of July, the utility can assume its PPA obligations, including the one with Topaz Solar, which expires in October 2039.

The Topaz solar power plant was built by First Solar Inc (NASDAQ:FSLR) in San Luis Obispo County, using thin-film PV panels. The facility is owned by BHE Renewables LLC (BHER) and has been fully operational since end-February 2015.

Indirect parent Berkshire Hathaway Energy with its rating of A3 and the robust regulatory and public policy environment for renewables in California also lend support to Topaz Solar's rating, Moody's noted.

"While the project's standalone operating and financial performance would warrant a higher rating, the project's credit quality remains constrained by PG&E's credit quality since the project derives all of its operating cash flow from its PPA with PG&E."

(USD 1.0 = EUR 0.882)

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