Terra-Gen Finance downgraded by S&P Global Ratings to CCC+ on maturity risk

Terra-Gen Finance Co. LLC was downgraded today by S&P Global Ratings to CCC+ and a developing outlook, from B- and a negative outlook, on concern about the company's ability to refinance its term loan B by its December 2021 maturity. The company's senior unsecured notes were lowered as well, to B- from B.

S&P Global Ratings noted that the current balance of roughly $184 million for the TLB is a "bigger hurdle" for credit markets than the company's revolver, which was recently extended to October 2021. Ratings said it believes current volatility and limited market access for speculative-grade issuers, among other reasons, means the credit markets might not be open for Terra-Gen.

Ratings added that it believes the company's current liquidity is insufficient to repay the outstanding loan amounts on the TLB and revolver. The rating agency pointed out the company's sponsor, Equity Capital Partners, has "displayed a track-record of supporting Terra-Gen in the past," and Ratings said it believes the sponsor "could provide some measure of support in the future also."

Terra-Gen develops, owns and operates renewable energy projects including wind, geothermal and solar generating facilities.