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AES Red Oak LLC Jan 11

  • ID: 1833866
  • January 2011
  • Standard & Poors
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The 'BB-' ratings on U.S. power generator AES Red Oak LLC reflect its historically low debt service coverage and a merchant environment in the last eight years of the bond term. Still, a 20-year power purchase agreement (PPA) mitigates market exposure through 2020. Without this PPA, the project would operate under merchant conditions and may be unable to service its obligations at the current debt level. However, we expect debt to drop to manageable levels for merchant operations by the time the PPA expires. Ratings reflect Red Oak's stand-alone credit quality even though it receives some support in the form of liquidity lines from parent AES Corp. (BB/Stable/--) because we believe parental support is limited. Red Oak is a combined-cycle,...

Companies mentioned in this report are: AES Red Oak LLC,AES Corp. (The)
Action: Review

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Full Analysis

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AES Red Oak LLC,AES Corp. (The)

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