S&P downgrade Longview loans

S&P said it lowered the rating on Longview Power LLC’s $300 million senior secured term loan B facility due 2021 and $25 million revolving credit facility due 2020 to B from B+.

The outlook is negative.

The recovery rating on this debt remains at 2, indicating 70% to 90% expected default recovery.

The Longview Power project includes the 700 megawatt coal-fired Longview Power plant and associated coal production and supply operations of Mepco Holding, the agency said.

The downgrade reflects ongoing weak energy market conditions in the PJM Interconnection and the possibility that the project could breach its financial covenants within 12 months, S&P said.

The persistently low power prices have affected the company’s financial metrics and these market conditions are expected to continue, the agency said.

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