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S&P lifts Elwood bonds to BB
Standard & Poor's said it raised its rating on Elwood Energy LLC's $402 million 8.159% senior secured bonds due 2026 to BB from BB- and assigned a 2 recovery rating to the bonds.
The outlook is stable.
The agency said the upgrade reflects the greater likelihood that Elwood would be able to enter into replacement contracts or earn capacity payments at levels sufficient to cover debt service when its power sales agreement with Exelon Generation Co. LLC expires in 2012.
This is because of the favorable capacity market development in the PJM Interconnection and the structural provisions in the bond financing documents that trap cash and restrict distribution to sponsors based on the level of contracted capacity and robustness of debt service coverage ratios, S&P explained.
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