S&P affirms Drax at BB+

S&P said it affirmed its long-term issuer credit ratings on Drax Power Ltd. and its parent Drax Group Holdings Ltd. (Drax) at BB+. The outlook is stable.

S&P affirmed the BB+ rating on the senior secured notes issued by Drax Finco plc, whose obligors are Drax and the key operating subsidiaries within the group. The recovery rating on the debt is 4, indicating an expectation of recovery prospects of about 35% in the event of a payment default.

S&P also affirmed the BBB- issue rating on the super senior revolving credit facility, raised by Drax Corporate Ltd., with a recovery rating of 1, indicating an expectation of recovery of about 95% in the event of a payment default.

“The affirmations follow Drax's announcement that it has agreed to acquire a portfolio of U.K.-based low carbon assets from Scottish Power's Spanish parent, Iberdola, as a part of its strategy to reduce exposure to coal-based generation,” S&P said in a news release.

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