S&P ups Kiowa, Tenaska Okla. bonds to 1

Standard & Poor's said it revised its recovery rating to 1 from 2 on Kiowa Power Partners' $281 million of senior secured bonds due 2021 and $361 million of senior secured bonds due 2013.

The agency said it also affirmed Kiowa's BBB- rating.

In addition, S&P said it revised its recovery rating to 1 from a six on Tenaska Oklahoma I LP's $73.5 million of senior secured notes due 2014. It also affirmed Tenaska Oklahoma's BB- rating.

The outlook is stable.

"The recovery rating was revised to reflect a timely year of default and an updated valuation analysis in the Electric Reliability Council of Texas," said S&P credit analyst Grace Drinker.

"The most likely default scenario remains the same, with high operating costs combined with a significant deterioration in plant heat rate; however the default year has been pushed out to 2013 from 2011, one year before the expiration of Tenaska Oklahoma's bonds."

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