S&P assigns Panda Temple loans B

Standard & Poor's said it assigned its preliminary B credit rating to Panda Temple Power LLC's $405 million debt.

The outlook is stable.

The agency also assigned a preliminary 2 recovery rating to the term loan B and related senior secured credit facilities.

Temple is a special-purpose, bankruptcy-remote entity established to build and operate the Panda Temple Power Plant, an approximately 758 megawatt natural gas-fired, combined-cycle generation facility in Temple, Texas, about 130 miles south of Dallas. Construction concluded in July 2014.

Temple now dispatches into the north subregion of the Electric Reliability Council of Texas (Ercot) market and abuts the Panda Temple II Power plant, which should come on line in Summer 2015. Panda Power Funds and a consortium of other investors own the equity in the project.

Temple will service its debt from revenues generated by selling electricity into Ercot. S&P expects revenues to be volatile throughout the project's life, although financial hedges create a floor for cash flow during the next few years.

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