Fitch Ratings has downgraded the rating on Northampton
Generating Co., L.P.'s (Northampton) $153 million senior tax-exempt
series 1994 A resource recovery revenue bonds due 2019 to 'BB-' from
'BBB-' and removed it from Rating Watch Negative.
Going forward, debt service coverage ratios are projected to occasionally reach breakeven levels over the remaining term of the series A bonds, and rely on deferment of subordinated expenses to avoid falling below 1.00 times. Technical performance has been strong, but operating margins continue to be lower than originally projected due to higher operating expenses and lower energy pricing. In addition, Fitch affirms the 'BBB-' rating of the $25 million ($100,000 outstanding) senior taxable convertible series 1994 B bonds due Jan. 1, 2007.
Northampton consists of a 112-megawatt (MW) (net) coal-fired qualifying facility in Northampton County, PA, that supplies energy to Metropolitan Edison Co. and steam to Newstech PA, LP. Cogentrix Energy, Inc. (Cogentrix) indirectly owns approximately 99.9% of Northampton, which is organized as a limited partnership. Subsidiaries of Cogentrix manage the partnership and perform operations and maintenance at the facility. The debt was issued by the Pennsylvania Economic Development Financing Authority, and the proceeds loaned to Northampton.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Going forward, debt service coverage ratios are projected to occasionally reach breakeven levels over the remaining term of the series A bonds, and rely on deferment of subordinated expenses to avoid falling below 1.00 times. Technical performance has been strong, but operating margins continue to be lower than originally projected due to higher operating expenses and lower energy pricing. In addition, Fitch affirms the 'BBB-' rating of the $25 million ($100,000 outstanding) senior taxable convertible series 1994 B bonds due Jan. 1, 2007.
Northampton consists of a 112-megawatt (MW) (net) coal-fired qualifying facility in Northampton County, PA, that supplies energy to Metropolitan Edison Co. and steam to Newstech PA, LP. Cogentrix Energy, Inc. (Cogentrix) indirectly owns approximately 99.9% of Northampton, which is organized as a limited partnership. Subsidiaries of Cogentrix manage the partnership and perform operations and maintenance at the facility. The debt was issued by the Pennsylvania Economic Development Financing Authority, and the proceeds loaned to Northampton.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.