Bangkok--17 Oct--Standard & Poor's
Standard & Poor's Ratings Services said today it placed on CreditWatch Positive its 'B+' rating on electricity generator MACH Gen LLC's $580 million ($574.2 million outstanding) senior secured first-lien term loan B due 2014, $100 million first-lien working-capital facility due 2012, and $60 million first-lien synthetic LOC facility due 2013.
Standard & Poor's left unchanged the '1' recovery rating on the combined initial $734 million first-lien senior secured debt obligations, reflecting our expectation of full recovery of principal in the event of a default.
The CreditWatch placement is a result of the company's decision to sell its Covert generating plant near South Haven, Mich. to Tenaska Capital Management LLC and to use a portion of the proceeds to reduce its first-lien debt. The Covert plan is a 1,100 MW natural-gas fired combined cycle facility that began operation in 2004. The CreditWatch will remain in place until the extent of debt reduction is finalized, at which point we could raise the rating.
MACH Gen benefits from a $100 million working-capital facility ($75 million undrawn) that it will use to fund each plant's seasonal operating requirements and provide finance for any capital-spending costs that the project incurs. Working-capital funds are also available to cover any debt service shortfalls that may arise. Lenders also benefit from an additional six-month debt service reserve fund.
Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Credit Ratings Search.
Media Contact:
Edward Sweeney, New York, (1) 212-438-6634
[email protected]
Analyst Contact:
Matthew Hobby, New York (1) 212-438-6441