S&P trims Terra-Gen

S&P said it lowered Terra-Gen Finance Co. LLC’s issuer rating to CCC+ from B- and its senior unsecured notes to B- from B. The 2 recovery rating on its senior secured term loan remains unchanged, indicating expectations for substantial (70%-90%; rounded estimate: 85%) recovery in default.

“The downgrade reflects the company's near-term refinancing risks. Terra-Gen successfully extended the maturity of its $20 million revolving credit facility to Oct. 31, 2021, albeit with total availability $2.5 million lower than the previous availability. Despite its successful revolver maturity extension, we believe that the company has limited time and liquidity to refinance its term loan, which matures in December 2021,” S&P said in a press release.

The agency also revised the outlook to developing from negative. The new outlook reflects the probability S&P may lower or raise the rating, depending on whether Terra-Gen successfully refinances its December term loan and generally maintains consistent operating performance, the agency said.

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