S&P Global Ratings revised its outlook on Southeast PowerGen Holdings LLC to stable from negative, citing the company's improved credit metrics following the sale of the 745.2-MW Washington County gas-fired facility in Georgia to Gulf Pacific Power.
"Southeast PowerGen LLC's term loan B balance has decreased by almost half following the sale of the Washington County power plant. This, as well as some improvement in SEPG's performance and market conditions, has resulted in stronger credit metrics for the project. However, this is not enough to affect our 'B' rating," the rating agency said in a report.
S&P also raised its recovery estimate on Southeast PowerGen's debt to 60% from 50% to reflect its expectation for meaningful recovery in a default.
"The stable outlook reflects our expectation that market conditions will steadily improve, but that our minimum [debt service coverage ratio], which occurs in our refinancing period, will remain in the 0.8x-1.0x range," the agency said.
Prior to the completion of the Washington County facility deal, asset manager Carlyle Group LP became 100% owner of Southeast PowerGen after acquiring the remaining 24.95% stake in the company from GE Energy Financial Services.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.