S&P boosts AES Ironwood bonds view to positive

Standard & Poor's said it revised the outlook on AES Ironwood LLC's B+-rated $308.5 million senior secured bonds to positive from stable, following its similar action on The Williams Cos. Inc. (B+/positive/B-2).

S&P said the rating on AES Ironwood's bonds is constrained by the rating on Williams.

The agency added the rating reflects risks that include its project depends entirely on power-purchase agreement payments from Williams Power to cover all of its operating expenses and debt service and low energy market prices render the PPA payments currently out of market.

S&P said offsetting these risks are strengths that include a PPA for the first 20 years of the bond term eliminates fuel risk and electricity price risk for lenders and the plant has a direct transmission link to Metropolitan Edison Co. (BBB-/positive) and direct access to the Texas Eastern gas pipeline ensures firm fuel transportation.

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