S&P moves Parkway view to negative

S&P said it changed its outlook for Parkway Generation LLC to negative from stable and affirmed the BB rating on the company’s senior secured term loan facilities. The 1 recovery rating indicates substantial (90%-100%; rounded estimate: 90%) recovery in a default scenario, is unchanged.

The weaker outlook follows Parkway upsizing its term loan facility by $75 million to partially fund a $175 million distribution to sponsors, S&P said in a press release.

Additionally, in a press release, the agency noted, “The negative outlook reflects the possibility that the project could underperform our base-case scenario in the next 12-24 months due to lower-than-expected sweeps, materially lower capacity factors, or higher emissions costs. We expect the project to sweep $85 million-$95 million in the next 12 months starting October 2022.”

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