OREANDA-NEWS. S&P Global Ratings said today that it assigned its preliminary 'BB-' rating to MRP Generation Holdings LLC's proposed $310 million term loan B due 2022 and $30 million revolving credit facility due 2021. The outlook is stable. We also assigned our preliminary '1' recovery ratings, indicating our expectation for very high (90%-100%) recovery in the event of a payment default.

The 'B+' rating on the existing term loan B and revolving credit facility due 2017 is unchanged, but we expect to withdraw it at the close of this transaction, which is intended to repay that debt. At close, we will review the final documentation associated with the new debt to determine if features of the transaction structure constrain the rating.

MRP Generation Holdings LLC is a special-purpose, bankruptcy-remote entity that owns three merchant natural gas-fired power plants in the PJM Interconnection and California Independent System Operator (CAISO) markets, with a combined nominal capacity of 1,380 megawatts (MW). The assets are the 830 MW High Desert Facility, completed in April 2003, the 300 MW Big Sandy facility, completed in June 2001, and the 250 MW facility Wolf Hills, completed in May 2001. High Desert sells energy and capacity into CAISO near Los Angeles, while Big Sandy and Wolf Hills sell energy, capacity, and ancillary services into the PJM American Electric Power zone

"The stable outlook reflects our view that MRP Generation Holdings LLC will continue to meet our expectations both operationally and financially with DSCRS above 1.5x on a consistent basis, and have high availability at all plants," said S&P Global Ratings credit analyst Kimberly Yarborough.