S&P: Atlantic Power notes BB-

Standard & Poor's said it assigned a BB- preliminary long-term corporate credit rating to Atlantic Power Corp., along with a preliminary issue rating of BB- to its $460 million senior unsecured notes due in 2018.

The agency also said it assigned a 4 preliminary recovery rating the notes, indicating 30% to 50% expected recovery in a default.

The preliminary rating is pro forma of Atlantic Power's proposed acquisition of Capital Power Income LP, the agency said.

The outlook is stable.

The preliminary ratings reflect the company's reliance on distributions from its underlying portfolio of energy projects that benefit from power-purchase agreements with largely investment-grade counterparties, S&P said.

The ratings also consider resource concentration - natural gas - and some vulnerability to availability declines, operation and maintenance cost increases and high leverage, the agency said.

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