S&P assigns ExGen Texas loan BB-

Standard & Poor's said it assigned its BB- project rating to ExGen Texas Power LLC's $675 million senior secured term loan B due in 2021.

The recovery rating on this debt is 2, indicating expectations of "substantial" (70% to 90%) recovery in a default scenario.

The outlook is stable.

S&P said the BB- rating mainly reflects the volatility of cash flows inherent in merchant power markets, partially offset by commodity hedges that cover close to 80% of S&P’s projected gross margin through 2017, and about 50% of gross margin in 2018.

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