S&P assigns Bosque Power loan B+

Standard & Poor's said it assigned its preliminary B+ credit rating to Bosque Power Co. LLC's proposed $412 million senior secured facilities.

The agency said that the credit facilities consist of a $25 million revolving credit facility due 2013 and a $387.5 million term loan B due 2015, of which there will be a $203 million construction sub-amount and a $95 million deposit letter of credit sub-amount.

A recovery rating of 1 was also assigned to the senior secured credit facilities, reflecting the expectation of full recovery of principal in a payment default scenario, the agency noted.

The outlook is stable.

Proceeds of the proposed debt issuance, along with equity contributed by the sponsors, will help fund the cost of acquisition, liquidity needs, as well as the construction cost of converting two simply-cycle generation turbines to combined-cycle operating mode, S&P said, adding that the ratings on the bank loans reflect the exposure to merchant risk as only 245 MW of Bosque's current 570 MW total capacity is hedged.

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