S&P rates HCP loans B-, CCC

Standard & Poor's said it assigned a B- corporate credit rating to HCP Acquisition Inc., which is wholly owned by Harbinger Capital Partners and was established to acquire the Calpine Power Income Fund; a B- rating with with a recovery rating of 2 to HCP's $427.9 million senior secured first-lien loan due 2014 and a CCC rating with a recovery rating of 5 to its $171.2 million senior secured second-lien loan due 2015.

The outlook is stable.

HCP will use the proceeds of the first- and second-lien loans to partially finance its acquisition of Calpine Power Income Fund's publicly held units and the class B shares previously held by Calpine Canada Power Ltd., a subsidiary of Calpine Corp.

The agency said the ratings are largely driven by HCP's very aggressive debt financing and significant asset concentration. Furthermore, the relatively new assets have exhibited slightly lower-than-average operating performance.

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