Research Update: Lightstone HoldCo LLC 'BB-' Debt Rating Affirmed On Plan To Add $300 Million To Term Loan B; Outlook Stable

We are affirming our 'BB-' rating on Lightstone HoldCo LLC's debt following the announcement that it plans to issue an additional $300 million on the term loan B under the credit agreement. We have updated our base case to include some realized and expected cost savings from capital spending programs at generation units Gavin and Lawrenceburg, which improve our expectations for cash flow generation. We expect a minimum debt-service coverage ratio (DSCR) of around 1.38x in 2024 during the post-refinancing period. The outlook is stable, reflecting our expectations for sound operational performance and compliance with the Pennsylvania-Jersey-Maryland (PJM) Interconnection capacity performance construct. The recovery rating is revised to '2' from '1', indicating our expectation of substantial (70%-90%; rounded estimate: 70%)

...+ We are affirming our '##-' rating on Lightstone HoldCo LLC's debt following the announcement that it plans to issue an additional $300 million on the term loan B under the credit agreement. + We have updated our base case to include some realized and expected cost savings from capital spending programs at generation units Gavin and Lawrenceburg, which improve our expectations for cash flow generation. We expect a minimum debt-service coverage ratio (DSCR) of around 1.38x in 2024 during the post-refinancing period. + The outlook is stable, reflecting our expectations for sound operational performance and compliance with the Pennsylvania-Jersey-Maryland (PJM) Interconnection capacity performance construct. + The recovery rating is revised to '2' from '1', indicating our expectation of substantial (70%-90%; rounded estimate: 70%) recovery in the event of default; it has fallen due to a higher debt quantum....

Research Update