S&P cuts MACH Gen loan

Standard & Poor's said it lowered the rating on MACH Gen LLC's $160 million first-lien facilities to B from BB-. The downgrade stems from increased refinancing risk given the approaching first-lien maturity on Feb. 22, 2012 and increased uncertainty in the debt market.

First-lien debt consists of a $100 million first-lien working-capital revolving credit facility due Feb. 22, 2012 and $60 million first-lien synthetic letter of credit facility due Feb. 22, 2013.

S&P changed the outlook to negative from stable, reflecting the increased possibility that the project may not refinance the first-lien debt before its maturity date.

The recovery rating on the first-lien senior secured debt obligations remains 1, reflecting very high (90% to 100%) recovery of principal if a default occurs.

The negative outlook reflects expectations that the high second-lien debt burden will make it difficult to refinance the remaining first-lien facilities in 2012 and 2013 despite the low first-lien leverage, the agency added.

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