S&P rates O&M Star loan BB

Standard & Poor's said it assigned its BB senior secured debt rating and 2 recovery rating to O&M Star Generation LLC's $278 million senior secured credit facility due 2014.

The outlook is stable.

O&M Star was formed to acquire equity stakes in and debt obligations of Orange Cogeneration LP and Polk Power Partner LP, the agency said.

The BB rating on the O&M Star's loans reflects that the debt is structurally subordinate to debt at Orange and Polk and the power-purchase agreements contain clauses giving the offtakers the option to reduce payments if the Florida Public Service Commission denies recovery of payments under the agreements.

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