S&P cuts West Deptford recovery rating

S&P said it revised the recovery rating on West Deptford Energy Holdings LLC’s (WDE) senior secured debt to 3 from (50%-70%; rounded estimate: 60%) from 2, which indicates meaningful recovery in the event of default.

“The change in recovery rating is a result of our downward revision of the plant's value at the time of default,” the agency said in a press release.

“We project a higher TLB balance at maturity, given weak energy margins and depressed capacity prices. We now project a TLB balance of about $385 million at maturity in 2026, compared with our previous expectation of about $325 million-$350 million. This is largely spurred by our revised expectation of cash sweep against the TLB.

“For example, the project was unable to materially benefit from high power prices in 2022, as its total generation was lagging. Its average capacity factor was about 28%, which is low for an efficient facility. As a result, the project swept only $11 million compared with our expectation of $15 million-$20 million,” S&P said.

The outlook is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.