Fitch to rate Mackinaw loan BB-

Fitch Ratings said it expects to assign a BB- rating to Mackinaw Power, LLC's proposed $145 million senior secured term loan and a BBB- rating to its proposed $296 million senior secured bonds.

Together with an equity contribution of $180 million, the debt proceeds will be used to finance the acquisition of five contracted natural gas-fired generating assets from Progress Ventures Inc. and Progress Genco Ventures, LLC, subsidiaries of Progress Energy, Inc.

The agency said the ratings reflect its assessment of Mackinaw's ability to provide full and timely payment of the debt service obligations solely from operating cash flows, independent of the credit quality of its sponsor ArcLight Energy Partners Fund III, LP.

In addition, Fitch said the bonds' rating reflects power purchase agreement-contracted cash flows, independent of merchant cash flows that may occur after certain power purchase agreements expire in 2015, and the term loan rating is based on incremental risks associated with its refinancing and on the consolidated debt service coverage for the bonds and the term loan, due to the structural subordination of the term loan.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.