Ratings agency downgrades FirstEnergy; cites default risk

AKRON, Ohio (AP) — A credit rating agency says it’s highly likely a FirstEnergy Corp. subsidiary will default on a $100 million bond payment in early April that will result in bondholders losing a significant percentage of their investments.

The Akron Beacon Journal reports Moody’s Investors Services said Tuesday it had downgraded FirstEnergy Solutions on news that the Akron-based company has received a $2.5 billion infusion from equity investors and had formed a restructuring working group to address debt problems.

The company said it doesn’t comment on investment firm ratings changes.

A Moody’s analyst said in a news release that the probability of default and expected losses for FirstEnergy Solutions are high.

Moody’s said the formation of the restructuring working group indicates that the FirstEnergy Solution is getting closer to default.

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