S&P puts Sutton Bridge on positive watch

Standard & Poor's said it placed on CreditWatch with positive implications the BBB- senior secured issue ratings on the £195 million 8.625% fixed-rate bonds and $150 million 7.97% fixed-rate bonds issued by Sutton Bridge Financing Ltd. with an unconditional guarantee of payment provided by Sutton Bridge Power.

The CreditWatch placement follows the notice of early redemption that Sutton Bridge Financing served to bondholders Dec. 12, S&P said.

The agency said it expects the redemption of the outstanding bonds to occur Jan. 29, 2013.

EDF Energy plc reached an agreement over the sale of Sutton Bridge Power to a Macquarie-led consortium of investors.

S&P said it estimates that the redemption amount, including makewhole premium, will be about £150 million. The agency said it understands that the issuer is planning to finance this amount with a combination of Sutton Bridge Power's cash balances and reserves - currently about £80 million - and a loan from EDF Energy.

As a result, the ratings on the bonds issued by Sutton Bridge Financing will not only reflect the operating and financial risk of the underlying assets, Fitch said, but also the high likelihood of external support provided by EDF Energy to ensure the full redemption of the outstanding debt.

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