S&P lowers Longview Power to CCC

S&P said it lowered the rating on Longview Power LLC to CCC from B-.

The outlook is negative.

The agency also revised the recovery rating on the company’s debt to 3 from 2, indicating expectations for meaningful (50%-70%; rounded estimate: 50%) recovery if a default occurs.

"The negative outlook reflects our view that the project is vulnerable and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments over the next six to 12 months," S&P credit analyst Kimberly Yarborough said in a news release.

"We view the issuer's capital structure to be unsustainable in the long term given current market conditions. We expect that the project will have difficulty meeting the 1.1x covenant test in March 2018, at which time it could face a default."

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