Moody's rates Cedar Bay loan Ba3

Moody's Investors Service said it assigned a Ba3 rating to Cedar Bay Generating Co., LP's $250 million senior secured term loan B due 2020.

Cedar Bay owns the nominally rated 250 MW coal-fired, cogeneration qualifying facility under the Public Utility Regulatory Policy Act of 1978. The project, which commenced commercial operation in January 1994, is located in Jacksonville, Fla.

The outlook is stable.

"The assigned Ba3 rating reflects 100% contracted cash flows with Florida Power & Light Co. under a power purchase agreement (PPA) that extends for five years past the maturity of the loan, but is balanced against an imperfection in the PPA resulting in the prospect for substantial negative energy margin which reduces the benefits of that PPA," Moody's analyst Charles Berckmann said in a news release.

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