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S&P may cut Bosque Power
Standard & Poor's said it placed the B+ rating on Bosque Power Co. LLC's $412.5 million senior secured facilities on CreditWatch with negative implications.
The action reflects uncertainty of physical call option hedge receipts following the downgrade of Lehman Brothers Commodity Services to BB-/Watch developing/B and the downgrade of Lehman Brothers Holdings Inc. to D, according to the agency.
Ratings on the bank loans reflect exposure to merchant risk and possible refinancing risk, the agency said.
Partially offsetting weaknesses is the hedge that provides some cash flow stability during first three years, an excess cash sweep designed to repay debt during periods of strong cash flow and adequate liquidity, the agency noted.
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