S&P rates GWF Energy loans BB

Standard & Poor's said it assigned its preliminary BB rating and preliminary 2 recovery rating to project finance entity GWF Energy Holdings LLC's proposed $202.9 million in senior secured credit facilities due in 2017 and 2018.

GWF Energy Holdings, which Highstar Capital owns, will use the proceeds along with about $170 million in Highstar equity to purchase GWF Energy LLC.

S&P said the company's business strengths include cash flows that get support from tolling agreements with Pacific Gas & Electric Co. The agreements have a duration of 10 years each for the Tracy combined-cycle plant and the twin Hanford and Henrietta plants.

"The stable outlook reflects highly predictable tolling agreement revenues for years to come and our expectations that the Tracy conversion will have a successful start-up," said S&P credit analyst Manish Consul in a news release.

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