S&P cuts Kestrel loan

S&P said it downgraded Kestrel Acquisition LLC’s senior secured debt rating to B from B+. The 2 recovery rating is unchanged.

Due to continued financial underperformance and weakness in projected spark spreads, S&P said it expects Kestrel will carry higher projected debt balances through 2025 when its term loan matures.

The agency said it revised its forecast to reflect higher debt balances and lower expected cash flows in future periods. The result will be lower debt service coverage ratios (DSCRs) throughout the life of the plant and increased refinancing risk.

“We lowered our issue-level rating on Kestrel by one notch to B after the project did not sweep any cash against its term loan in 2020,” S&P said in a press release.

The outlook is negative.

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