S&P revises LSP Batesville view to developing

Standard & Poor's said it changed the outlook to developing from negative on LSP Batesville Funding Corp.'s $150 million senior secured bonds due 2014 and $176 million senior secured bonds due 2025.

The change in outlook comes after news of the pending sale of the facility to TPF II Southeast Holdings LLC, whose parent TPF II LP is a private equity fund managed by Tenaska Capital Management.

The agency also said it affirmed the CC rating and 4 recovery rating on the bonds.

The 4 rating reflects 30% to 50% expected recovery in a default.

The January and July draws on the debt-service reserve account left only a negligible balance in that account, S&P said.

The next debt-service payment of about $16.3 million is due Jan. 15, 2012. Given the substantial depletion of the debt-service reserve and operational difficulties, the agency said it believes LSP Batesville will not have sufficient funds to make this payment.

The developing outlook reflects the uncertainty of timing of completion of acquisition and the possible future support from the new owner, S&P added.

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