S&P changes Sandy Creek view

S&P said it revised its outlook on Sandy Creek Energy Associates LP to negative from stable and affirmed the B- project finance rating on the senior secured term loan B due 2020.

The recovery rating of 2 is unchanged, reflecting an expectation of substantial (70%-90%; rounded estimate: 70%) recovery in the event of default.

The agency said the negative outlook stems from continued challenging conditions in Electric Reliability Council of Texas Inc. that, over time, have contributed to heightened refinancing risk.

“This continues to be caused by lower-than-expected demand growth, but it is also partially the result of diminished gas pricing–the impacts of this fall disproportionately on coal-fired generators like Sandy Creek, but we note that the contracted end of the asset has not been affected by this,” S&P said in a news release.

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