S&P cuts Longview Power facilities to B

S&P said it lowered its rating on Longview Power LLC's senior secured term loan B due 2021 and revolving credit facility due 2020 to B- from B.

The outlook is stable.

The 2 recovery rating is unchanged, reflecting an expectation of substantial (70% to 90%) recovery of principal if a payment default occurs.

"The stable outlook reflects our view that despite low DSCRs in 2017 and 2018, Longview will be able to meet its financial obligations over our forecast period, largely due to a favorable liquidity position," S&P credit analyst Kimberly Yarborough said in a news release.

The agency expects Longview to experience very low cash flow in 2017 and 2018 due to increased capital spending at the project's coal mine and reduced energy margins in the Pennsylvania-Jersey-Maryland (PJM) market. S&P said it forecasts debt service coverage ratios (DSCRs) well below 1 time in these two years.

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