Moody's: Longview loans B3

Moody's Investors Service said it assigned a rating of B3 to the $690 million of amended, extended and upsized credit facilities proposed by Longview Power, LLC.

The facilities are an extension of Longview's existing $1.1 billion of credit facilities which, as part of this transaction, will be upsized to $1.175 billion.

Moody's also said it downgraded the existing credit facilities to B3 from B2.

The outlook has been revised to stable from negative.

The ratings are driven by the company's extremely weak financial performance from this nearly completed 695-megawatt super critical coal-fired power project in West Virginia, the agency said.

In its first year of operations, the project is not expected to generate sufficient cash flow from operations to fully cover its debt service obligations, Moody's said, and will likely need to draw on its external liquidity sources.

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