Research Update: Invenergy Thermal Operating I LLC 'BB' Rating Off CreditWatch And Affirmed On Upsized Term Loan B; Outlook Stable

Invenergy Thermal Operating I LLC (ITOI) plans to issue an additional $50 million under its term loan B (TLB) credit agreement, upsize its revolver capacity by $5 million (to $70 million), and make other changes that relax its current commodity hedging limitations. Lender approval is required, and the proceeds will fund a shareholder distribution. We are affirming our 'BB' rating on the $400 million TLB ($350 million plus $50 million add-on). The recovery rating is unchanged at '1', indicating our expectation of very high recovery (90%-100%, rounded estimate: 90%) in a default. We are removing the CreditWatch developing listing placed on the rating on May 30. This revision incorporates the proposed $50 million TLB add-on, but also reflects the resolution

...+ Invenergy Thermal Operating I LLC (ITOI) plans to issue an additional $50 million under its term loan B (TLB) credit agreement, upsize its revolver capacity by $5 million (to $70 million), and make other changes that relax its current commodity hedging limitations. Lender approval is required, and the proceeds will fund a shareholder distribution. + We are affirming our '##' rating on the $400 million TLB ($350 million plus $50 million add-on). The recovery rating is unchanged at '1', indicating our expectation of very high recovery (90%-100%, rounded estimate: 90%) in a default. + We are removing the CreditWatch developing listing placed on the rating on May 30. This revision incorporates the proposed $50 million TLB add-on, but also reflects the resolution of an analytical error related to our conclusion that the ITOI structure contained unique elements, and that our project finance criteria is insufficient to assign ratings to ITOI debt without modification. Our revised approach instead...

Research Update