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FirstEnergy Solutions in Discussion with Creditors

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On August 14, 2017, S&P Global Ratings lowered its issuer credit rating on FirstEnergy Solutions Corp. to CCC- from CCC, its secured debt rating to CCC+ from B- and its unsecured debt rating to CCC- from CCC. According to S&P Global, the rating action stems from the recent announcement by the Company that it was pursuing exchange discussions with its creditors. This announcement appears to potentially accelerate the timeframe to default, which S&P had previously believed would immediately precede 2018 maturities. An exchange that provides less than full compensation would be considered an event of default under S&Ps criteria. “It’s not clear, currently, how long it will take for these events to transpire, but, even absent an agreement with the creditors, we expect that the company will file for bankruptcy in advance of its 2018 maturities…” Read more on distressed companies.