S&P: Sapphire Power loan recovery revised to 1

Standard & Poor's said it affirmed the preliminary B+ ratings on Sapphire Power Finance LLC's $280 million senior secured facilities, consisting of a $250 million term loan B due in July 2018 and a $30 million revolving credit facility due in July 2018.

The agency also said it revised the preliminary recovery rating to 1, indicating 90% to 100% expected default recovery, from 2.

The outlook is stable.

The proceeds will be used to pay a $54 million dividend to sponsors and refinance its existing senior secured facilities, a $185 million term loan maturing in 2018 and a $25 million revolving facility maturing in 2016.

The ratings reflect a business risk that involves cash flow exposure to merchant power markets in the Northeast United States with eight natural gas-fired generation plants totaling 794 megawatts, S&P said.

The stable outlook reflects an expectation of good operations and stability of cash flows as a result of a fixed capacity market through May 2017 and the project's hedging activities through 2016, the agency said, along with liquidity to address typical operational problems with these types of assets.

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