News

Fitch puts Coso Geothermal Power Holdings outlook to “positive”

Alexander Richter 1 Feb 2010

Fitch Ratings has affirmed the 'BBB-' rating of Coso Geothermal Power Holdings, LLC's (CGP) pass-through trust certificates due 2026 and revised the Outlook to Positive from Stable.

In a release, “Fitch Ratings has affirmed the ‘BBB-‘ rating of Coso Geothermal Power Holdings, LLC’s (CGP) pass-through trust certificates due 2026 and revised the Outlook to Positive from Stable.

The rating is based on CGP’s long-term financial performance, which is subject to volumetric risk associated with the productivity of the Coso project’s geothermal resource. While recent financial results have fallen short of original projections, the rating affirmation reflects Fitch’s expectation that Coso’s energy output will return to base-cases levels with the ongoing implementation of an aggressive capital improvement plan. Fitch has evaluated CGP’s credit quality on a stand-alone basis, independent of the credit quality of its owners. CGP is an indirect, wholly-owned subsidiary of Terra-Gen Power, LLC (Terra-Gen). Affiliates of ArcLight Capital Partners, LLC and Global Infrastructure Partners, LLC (collectively, the sponsors) indirectly hold 100% of the ownership interests in Terra-Gen.

Coso accomplished a major capital improvement milestone with the completion of the Hay Ranch project, which has been designed to enhance and stabilize steam production through supplemental water injection. Coso expects to realize the beneficial effects of Hay Ranch in late 2010 with full ramp-up in 2011. Apart from Hay Ranch, Coso has made considerable progress with its capital improvement program, which represents an expansion and acceleration of previously contemplated expenditures. Steam production has started to recover since the 3rd quarter of 2009, and Terra-Gen has indicated that current production is sufficient to support a capacity of 200 megawatts (MW).”

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Source: Release via EarthTimes