S&P rates Talen Energy unit loans BB-

S&P said it assigned its preliminary BB- issue-level rating and preliminary 1 recovery rating to LMBE-MC HoldCo II LLC's $450 million senior secured term loan B and $25 million senior secured revolving credit facility.

LMBE-MC is a wholly owned project-financed subsidiary of Talen Energy Supply LLC.

The outlook is stable.

The recovery rating reflects an expectation of very high (90%-100%; rounded estimate: 95%) recovery in the event of default.

LMBE-MC consists of two merchant power plants that sell energy and capacity into the Pennsylvania- Jersey-Maryland market, a market pressured by weak demand growth and oversupply, S&P said.

The plants have the operational risk characteristics of typical power generators, although they have a strong operational track record, the agency noted.

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