S&P affirms AES Ironwood

Standard & Poor's said it affirmed its B+ debt rating on AES Ironwood LLC's $308 million senior secured notes.

The agency said it also assigned a recovery rating of 3 to the senior secured bonds, indicating the expectation of meaningful recovery in the event of a payment default.

S&P noted that the rating action on Ironwood's debt reflects the application of Standard & Poor's enhanced recovery rating-scale and issue rating framework, and does not reflect a change in our opinion of the company's default risk as reflected by the corporate credit rating.

The ratings on Ironwood reflect a historically low debt service coverage ratio, which are expected to be below 1x in years of high maintenance capital expenditures, a history of disputes with the offtaker and merchant risk during the last four years of the bond term, the agency added.

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