Moody's rates EFS Cogen loans Ba1

Moody's Investors Service said it assigned a Ba1 rating to EFS Cogen Holdings I LLC's proposed $925 million of senior secured first-lien credit facilities. The facilities consist of a $825 million term loan due 2020 and a $100 million revolving credit facility due 2018. The outlook is stable.

EFS is 100% owned by a subsidiary of General Electric Capital Corp. Concurrent with the closing of the proposed credit facilities, GE Capital will sell 50% of its ownership in EFS to an affiliate of Highstar Capital IV, LP.

Proceeds from the proposed term loan combined with the cash from Highstar will be used to repay all existing debt within the EFS project structure, including $120 million of senior secured bonds outstanding at East Coast Power LLC, and to fund a distribution to GE Capital in connection with the sale.

The agency said the Ba1 rating is supported by the stable and significant contracted cash flows that it expects the project to generate through April 2017. These cash flows, combined with a mandatory debt repayment requirement equal to a minimum 75% of excess cash flow, assures significant debt repayment during this timeframe. The rating also takes into consideration the attractive location of the project within the transmission constrained New York City market, Moody's said.

These positives, however, are balanced by the project's risk profile, which considers the financial leverage being incurred as well as the expected merchant nature of the revenues and cash flows beginning in 2017, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.