S&P gives Generation Bridge loans BB-

S&P said it gave preliminary BB- ratings to Generation Bridge II LLC's planned $325 million term loan B, $40 million term loan C and $40 million revolving credit facility, all of which are pari passu senior secured debt.

Generation Bridge II, a newly created project financed vehicle, will use the proceeds to buy three power plants from PSEG Power LLC, fund restricted cash and pay transaction fees and expenses. It will own 1.8 gigawatts of generation assets in Connecticut and New York.

The outlook is stable. “The stable outlook reflects our view that debt service coverage ratios should average around 3x over the life of the project while the company relies on cash sweep to pay down debt, combined with liquidity that we think will protect the project in our downside scenario. Our minimum debt service coverage ratio (DSCR) of 1.74x occurs in 2022, after which we expect annual DSCRs to largely remain above 2x,” S&P said in a press release.

“We project 2022 will be a weaker year in cash flow available for debt service (CFADS) generation given capital expenditure (capex) expectations, but we expect the project to repay about $30 million-$35 million annually on its term loan B through its maturity in 2028, leading to debt outstanding of about $125 million at maturity,” the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.