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S&P cuts Wolf Hollow loans to CCC+, CCC
Standard & Poor's said it lowered Wolf Hollow I LP's $260 million senior secured bank facility to CCC+ from B with 1 recovery rating and on the $110 million second-lien term loan to CCC from CCC+, with the recovery rating revised to 6 from 4.
The outlook is negative.
The downgrade stems from project leverage, financial performance and refinancing risk, according to the agency.
In the first half of 2011, Wolf Hollow could be materially close to its leverage covenant of 8.25x, the agency said.
Lower market heat rates or higher operating costs would result in a breach of the covenant.
S&P said the downgrade was also driven by Wolf Hollow's financial performance.
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