S&P lowers EIF Channelview view to stable

S&P said it affirmed the B+ rating on EIF Channelview Cogeneration LLC, but revised the outlook to stable from positive.

The project sponsors are pursuing debt amendments that will lead to less cash being swept, which is a credit negative, S&P explained.

However, this is offset by the incorporation of the Equistar revenue contracts into the analysis, as well as cost savings management has achieved, which is viewed to be sustainable, the agency said.

The stable outlook reflects a belief that power prices in ERCOT's Houston Hub will be in line with forward pricing over the next few years, leading to coverage levels of higher than 2x during the term loan B period, S&P said.

The agency said it expects the project to remain in the B rating category because the debt amendment will raise the amount required to be refinanced when it matures in 2025.

S&P said it revised the recovery rating to 1 from 2, indicating 90% to 100% expected default recovery.

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