S&P rates Panda Temple loan B+

Standard & Poor's said it assigned its preliminary B+ rating and preliminary 2 recovery rating to Panda Temple Power LLC's $214.84 million first-lien term loan A, $75 million term loan B, $10.16 million letter-of-credit facility and $5 million working capital facility.

The preliminary 2 recovery rating indicates substantial recovery (70% to 90%) of principal in a default scenario. Cross-default provisions exist between the term loan A and term loan B and all the debt is pari passu. The outlook is stable.

"Our rating reflects the project's construction risk, exposure to merchant energy prices, and a high degree of sensitivity to capacity factors and market heat rates," said S&P credit analyst Manish Consul in a news release.

The project will use loan proceeds to build the Panda Temple Power Plant, a nominal 758 megawatt natural gas-fired facility located in Temple, Texas.

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