S&P affirms Kincaid

Standard & Poor's said it affirmed the BBB- rating on Kincaid Generating LLC's $265 million 7.33% amortizing senior secured bonds due 2020.

The outlook is stable.

Kincaid is owned by Dominion Energy Inc., a wholly owned subsidiary of Dominion Resources Inc., and by Dominion Kincaid Inc., a wholly owned subsidiary of Dominion Energy.

The project's ownership structure does not limit its rating because Dominion Resources is highly rated, S&P said.

The rating on the bonds reflects both solid long-term coverage and low short-term debt service coverage ratios with near-term capital expenditures funded from liquidity, S&P said.

In 2012, cash-flow debt-service coverage, including capital expenditures, will likely be close to 1x because of expenditures on a new dry sorbent injection emissions control system and a major turbine maintenance that occurs about every 10 years, the agency said.

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