S&P puts Astoria on CreditWatch developing

Standard & Poor's said the CCC+ ratings on Astoria Generating Co. Acquisitions LLC's $430 million first-lien term loan due 2013 and its $100 million first-lien working capital facility due 2012 remain on CreditWatch with developing implications.

The CCC- rating on the $300 million second-lien term bank loan due 2013 also remains on CreditWatch with developing implications.

The recovery rating of 1 on the first-lien credit facilities is unchanged, indicating 90% to 100% expected recovery in a default.

The recovery rating of 5 on the second-lien credit facility is unchanged, indicating 10% to 30% expected recovery in a default.

If Astoria Energy II LLC continues to fully participate in the capacity, the winter capacity prices starting in November 2011 are expected to be at zero, S&P said.

In the near term, the agency said it thinks that if these lower prices continue, the company's cash flow will likely be insufficient to cover operating expenses, including capital maintenance.

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