S&P cuts Longview Power

Standard & Poor's said it lowered its rating on Longview Power LLC's senior secured facilities to BB- from BB. The facilities consist of a $300 million first-lien term facility due 2014, $350 million delayed-draw term facility due 2014, $250 million construction loan facility with term conversion due 2014, $100 million revolving facility maturing 2013 and $100 million synthetic letter of credit facility maturing 2014. The agency also said it lowered the recovery rating to 2 from 1, indicating an expectation for 70% to 90% recovery of principal in the event of a default.

The outlook was revised to negative from stable.

The downgrade and revised outlook result from a combination of much weaker merchant market conditions and significant delays in construction that resulted in the revision of the target date for substantial completion, S&P said.

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