Fitch Ratings affirms the $420 million Shepherds Flat Guaranteed Trust Certificates Series A-1-G senior secured fixed-rate trust certificates (guaranteed) at 'AAA'. The Outlook is revised to Negative. The rating of the guaranteed debt is linked to Fitch's U.S. Sovereign rating ('AAA', Negative Outlook). The $525 million A-1 senior secured fixed-rate loan, the $675 million A-2 senior secured floating-rate loan and the $105 million Series A-1-a senior secured fixed-rate trust certificates (non-guaranteed) are rated 'BBB-'. The Rating Outlook on the non-guaranteed debt ratings remains Stable.
KEY RATING DRIVERS
--U.S. Sovereign Rating Outlook Revision: On Nov. 28, 2011, Fitch affirmed the U.S. Sovereign rating at 'AAA' and revised the Outlook to Negative from Stable. The Shepherds Flat Series A-1-G senior secured fixed-rate trust certificates carry a U.S. guarantee as part of the Department of Energy (DOE) program.
--DOE Guarantees A-1-G Certificates: Shepherds Flat Funding Trust I (SFFT-I) Series A-1-G benefits from a 100% irrevocable and unconditional loan guaranty from the DOE for principal and interest, aligning it with Fitch's rating of the U.S. sovereign at 'AAA', with a Negative Outlook.
WHAT COULD TRIGGER A RATING ACTION
--A change in the U.S. Sovereign rating will have a commensurate impact on the rating of the guaranteed debt.
For additional information please refer to the New Issue Report link below.
TRANSACTION SUMMARY
Caithness Shepherds Flat is an 845-megawatt wind-powered electric generation project under construction in Gilliam and Morrow Counties, Oregon. CSF will be located along the Columbia River Gorge, and is anticipated to be the world's largest wind farm when completed. CSF was developed by Caithness Energy, Inc., and is owned jointly by Caithness, GE Energy Financial Services, Google Inc., Sumitomo Corporation of America, and Tyr Energy.
SFFT-I is a bankruptcy remote trust, non-recourse to the owners, that issued $525 million total debt which is 80% guaranteed by the DOE. The proceeds of SFFT-I's debt issue were loaned to CSF to fund a portion of the total $1.9 billion project costs. SFFT-I reached financial close in December 2010.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Rating Criteria for Infrastructure and Project Finance' (August 16, 2011);
--'Rating Criteria for Onshore Wind Farms Debt Structures' (April 20, 2011);
--'Caithness Shepherds Flat, LLC' New Issue Report (June 1, 2011.
Applicable Criteria and Related Research:
Rating Criteria for Infrastructure and Project Finance
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648832
Rating Criteria for Onshore Wind Farms Debt Instruments
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=620109
Caithness Shepherds Flat, LLC
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=634729
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