Moody's lowers Sandy Creek

Moody's Investors Service said it downgraded Sandy Creek Energy Associates LP's senior secured first-lien term and construction loans due 2015 to B1 from Ba3.

There is roughly $155 million outstanding under the first-lien term loan and $584 million outstanding under the first-lien construction term loan.

The outlook was changed to negative from stable.

Moody's said the action reflects several key factors: (a) a boiler incident that will delay completion until next year; (b) lower merchant power prices and higher coal prices than expected, resulting in lower revenues and cash flow than originally forecasted; (c) concomitant weaker credit metrics; and (d) a higher resulting refinancing amount projected at maturity of the debt.

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