S&P: Indiantown on positive watch

S&P said it affirmed the rating on Indiantown Cogeneration LP’s $268.4 million senior secured notes at BBB-, along with the rating on its $127.8 million subordinated notes at BB.

The agency also said it placed the ratings on CreditWatch positive based on the proposed acquisition of the project by Florida Power & Light Co. for $451 million.

The positive watch also reflects the company’s plans for reduced dispatch levels at the plant, which should improve coverage levels because of less operating risk and lower expenses, S&P said.

The proposed transaction further accelerates a trend toward higher coverage levels due to a step down in debt service beginning in 2016, the agency explained.

The credit watch will be resolved after the sale is closed, which is expected in November, S&P said.

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