Moody's assigns Astoria Generating loan B1, B3

Moody's Investors Service said it assigned a B1 rating to Astoria Generating Co. Acquisitions, LLC's proposed $650 million of first-priority senior secured credit facilities, which include a $430 million term loan due 2013, a $100 million working capital facility due 2012 and a $120 million Synthetic LC facility due 2011.

Moody's also said it assigned a B3 rating to Astoria's proposed $300 million second-lien senior secured term loan facility expiring in 2013. The outlook is stable.

The agency said the B1 first lien and B3 second lien ratings reflect the relatively high business and operating risks associated with older, in-city generating assets and the significant leverage associated with the project.

In Moody's opinion, operating risks are primarily associated with the merchant nature of the revenues and cash flows after the first two to three years and the operational necessities of maintaining availability, which include sizable capital expenditure investments associated with regular maintenance and increasingly stringent environmental mandates.

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