S&P assigns EFS Cogen loan BB+

Standard & Poor's said it assigned its preliminary BB+ senior secured rating and 1 preliminary recovery rating to EFS Cogen Holdings I LLP's proposed $825 million term loan B facility.

The 1 preliminary recovery rating indicates a very high likelihood of recovery (90% to 100%) of principal in a default scenario.

The outlook is stable.

S&P said the preliminary BB+ rating reflects its view of the following weaknesses: Merchant exposure after April 2017; relatively high initial debt kW ratio ($876); some merchant exposure during the remaining three and a half-year contractual period; less forward price visibility in the New York ISO market than in other regions, including PJM; no mandatory major maintenance reserve; and age of the Linden 1-5 assets.

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