S&P drops AES Eastern to D

Standard & Poor's said it lowered its rating on AES Eastern Energy LP's $550 million pass-through certificates due 2029 to D from CC after the company filed for Chapter 11 bankruptcy protection.

According to S&P, the filing came three days before a $30.6 million lease payment was due.

The agency said its 3 recovery rating on the certificates reflects an expectation of average recovery of principal under a payment default.

S&P said it does not base the recovery rating on any proposed restructuring plan, but the rating does reflect estimates of recovery based on a discounted cash flow analysis of AES Eastern's portfolio and all obligations, as they existed just before the default.

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