S&P lowers Green Country notes

S&P said it lowered the rating on Green Country Energy LLC's $319 million senior secured notes to B+ from BB.

The downgrade reflects an increase on the project's reliance on the debt service reserve to meet the redemption, S&P said.

The B+ rating reflects a view that there are prospects for the project to re-contract capacity and avoid the mandatory redemption, the agency said.

The outlook is negative because S&P believes that if the project's contract isn't renewed, there is insufficient liquidity to offset any further operational issues until February 2022, which would deplete the remainder of projected debt service reserve buffer, which is about $1.5 million.

The recovery rating on the debt remains at 1, indicating 90% to 100% expected default recovery.

Late last year, the replacement of a cracked rotor wheel significantly increased its maintenance costs, reducing the project's cash resources by more than expected, S&P explained.

The agency said it now forecasts that the project will need to draw on $15.4 million of the $16.8 million debt service reserve to meet the 2022 payment, which is about $7 million higher than previous estimates.

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