S&P lowers Panda Sherman loans

Standard & Poor's said it lowered its project finance ratings on Panda Sherman Power LLC's $372 million term loan B and $30 million letter of credit to B- from B.

At the same time, S&P removed the ratings from CreditWatch, where they were placed with negative implications on Aug. 12, 2015. The outlook is stable.

The 2 recovery rating on this debt, indicating “substantial” (70% to 90%; upper end of the range) recovery if a default occurs, is unchanged.

“The downgrade reflects our expectation that power prices in ERCOT will remain low during the next few years, based on weaker-than-expected demand, low natural gas prices, and significant renewable penetration,” said S&P credit analyst Michael Ferguson in a news release.

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