S&P revises Parkway loan recovery

S&P said it revised the recovery rating for Parkway Generation LLC’s term loan to 2 which indicates substantial (70%-90%; rounded estimate 85%) recovery in a default scenario, from 1. A 1 rating indicates full (90%-100%; rounded estimate: 95%) recovery. The agency also affirmed the B+ rating on the issuer’s senior secured term loans.

The expected recovery reflects Parkway’s $25 million add-on in total debt, S&P said.

“The add-on and the receipt of about $39 million in prepaid heat rate call option (HRCO) premiums alleviate constrained liquidity owing to a fully drawn revolver as of the end of the first quarter of 2024,” the agency said in a press release.

The outlook is negative.

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