S&P rates NE Energy loan B+

Standard & Poor's said it assigned the following preliminary ratings to NE Energy Inc.'s proposed debt issues, which will finance the acquisition of the generation assets of Northeast Utilities (BBB/stable), provide for LOCs and be available for general corporate purposes:

$35 million first-lien revolving credit facility due 2011 rated B+, with a recovery rating of 1;

$100 million first-lien LOC facility due 2013 rated B+, with a recovery rating of 1;

$550M first-lien term loan due 2013 rated B+, with a recovery rating of 1; and

$170 million second-lien term loan due 2014 rated B-, with a recovery rating of 5.

S&P said that the rating incorporates risks that include exposure to commodity risk in the merchant generation market and exposure to relatively new and uncertain regulatory regimes and rules of the competitive generation market as well as refinancing risk given the five-year revolving credit facility and seven-year term loans.

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