Moody's upgrades EIF Channelview

Moody's Investors Service said it upgraded the rating on EIF Channelview Cogeneration, LLC's senior secured credit facilities to Ba3 from B1.

The facilities consist of a $275 million senior secured term loan B due 2025 and $30 million revolving credit facility due 2023.

The outlook is stable.

Channelview owns a cogeneration facility located in the Houston zone of Ercot, Moody's noted.

The project has been in commercial operation since 2002 and provides an economic and reliable source of high and low-pressure steam and power to the adjacent petrochemical facility operated by Equistar Chemicals, LP, a subsidiary of LyondellBasell Industries, NV, Moody's said.

The upgrades reflect the implementation of several meaningful cost reductions undertaken by the sponsor that are expected to result in sustained financial improvement, the agency said.

The ratings are balanced against the potential for volatility in cash flow and margins given Channelview's position as a merchant generator and its dependence on revenues from the sale of energy at market prices in an energy-only market, Moody's said.

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