S&P rates Sandy Creek facilities BB-

Standard & Poor's said it assigned a final BB- rating and 2 recovery rating to Sandy Creek Energy Associates LP's $1 billion first-lien senior secured credit facilities.

The outlook is stable.

Proceeds will be used to build the Sandy Creek Energy Station, a coal-fired power generation plant in Riesel, Texas.

The ratings reflect the greenfield construction risks, high capital costs and leverage, and lack of coal supply exposing the project to commodity prices, the agency said.

The risks are tempered by the demand for long-term contracts, favorable demand characteristics due to transmission constraints and a redesigned nodal market structure from 2009 that would provide greater and more predictable value for capacity, according to S&P.

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