Moody's lifts Red Oak bonds to B1

Moody's Investors Service said it upgraded the rating of Red Oak, LLC's roughly $284 million senior secured bonds to B1 from B2 and revised the outlook to stable from positive.

Moody's said the upgrade reflects Red Oak's solid operational performance since its April 2013 return to service following an extended outage to repair its steam turbine. Specifically since April, the project has been operating with average availability above 95% and an average capacity factor above 75% (July and August capacity factors were close to 90%).

Although the outage will continue to affect Red Oak's financial results and liquidity profile in the short-run, the rating upgrade reflects the medium-to-longer term prospects for the project which include improved financial metrics owing to better operating performance and lower operating costs following an amendment to its long-term Term Warranty Agreement, the agency said.

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