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With much of the North American merchant generation sector in flux amid low commodities, stressed equities and tightening debt markets, some market participants expect a flurry of M&A activity to unfold in 2016.
Ryan Hardy, an energy and policy expert at PA Consulting Group, disagreed with a sentiment held by some that after two robust years of M&A, 2016 could mark a cool down in activity.
Ryan Hardy said: “Some of the traditional debt and equity players than have been active over the last few years may start to take a step back, mostly from a risk tolerance perspective, referring to traditional U.S. lenders such as banks and investment funds that may have reached peak portfolio exposure to merchant generation in certain markets, PJM Interconnection LLC in particular.”
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Ryan added: “But we're still seeing quite a few players on both the debt and equity side that are looking to deploy capital, and see energy and energy infrastructure as good investments for their risk tolerance. I do expect that we'll see, as time elapses, new players, international investors, banks or even utilities - those folks will step into that space because there will be demand for it, there will be a market.”