RT Journal Article SR Electronic T1 The Importance of Being Economic JF The Journal of Structured Finance FD Institutional Investor Journals SP 27 OP 39 DO 10.3905/jsf.1999.320219 VO 5 IS 3 A1 Robert Johnson YR 1999 UL https://pm-research.com/content/5/3/27.abstract AB A merchant plant is a generator that sells its energy and capacity into an open market and as a result is exposed to fluctuations in sales volumes and prices. Merchant plant credit analysis is an evolution of the fundamental analysis that Moody's has long undertaken when rating electric utilities and independent power projects (IPPs). The agency believes that the ratings of a merchant plant will be lower than that of a traditional single-asset IPP with the same capital structure and cash flow coverage of interest because of the greater volatility of its cash flows. The appropriate analytical beginning is to determine a creditable market forecast and to assess a project's break-even position relative to the market forecast.