S&P lifts Yellowstone Energy view to positive

S&P said it revised the outlook on Yellowstone Energy LP's senior debt to positive from stable and affirmed the BBB- rating on its $131.5 million senior secured notes due 2026.

The Yellowstone Energy project is a pet-coke-fueled, circulating fluidized-bed power plant adjacent to an Exxon Mobil Corp. refinery in Billings, Mont.

The plant produces electricity, steam and ash, S&P said, and sells its electricity to Northwestern Energy, the utility subsidiary of NorthWestern Corp. under a 35-year take-and-pay power purchase agreement that extends two years beyond the debt maturity.

The project's operational performance remains strong and pet coke prices have continued to decline, the agency said.

If operational performance remains steady, ancillary revenues increase and supplemental pet coke prices remain negative, the base case financial forecast will likely improve further, leading to higher minimum coverage, which will likely trigger a one-notch upgrade in the next year or two, S&P explained.

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